1. Analytic Foundations: Measuring the Redistributive Impact of Taxes and Transfers
- Author:
- Ali Enami, Nora Lustig, and Rodrigo Aranda
- Publication Date:
- 01-2017
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- This paper provides a theoretical foundation for analyzing the redistributive effect of taxes and transfers for the case in which the ranking of individuals by pre-fiscal income remains unchanged. We show that in a world with more than a single fiscal instrument, the simple rule that progressive taxes or transfers are always equalizing not necessarily holds, and offer alternative rules that survive a theoretical scrutiny. In particular, we show that the sign of the marginal contribution unambiguously predicts whether a tax or a transfer is equalizing or not.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Global Focus