In order to investigate redistributional effects induced by personal income tax (PIT), empirical researchers are used to fixing a common distribution of income before tax for all tax schedules being compared. On one hand, this approach allows to isolate the effect of tax policies. On the other hand, they do not deal with the fact that the income tax redistributive effect is mainly determined by the matching between the pre-tax income distribution and the tax schedule. This paper presents a simple procedure useful for practitioners wishing to take into account pre-tax distributional differences before undertaking comparisons between tax schedules, in particular with regard to the analysis of tax reforms which will act on unknown pre-tax income distributions. This new approach is illustrated for the Italian PIT case, according to the comparison of the 2005 tax reform versus the 2000 tax law.
Evaluating the income tax redistributive effects, a more comprehensive approach
RUSSO, FELICE
2006-01-01
Abstract
In order to investigate redistributional effects induced by personal income tax (PIT), empirical researchers are used to fixing a common distribution of income before tax for all tax schedules being compared. On one hand, this approach allows to isolate the effect of tax policies. On the other hand, they do not deal with the fact that the income tax redistributive effect is mainly determined by the matching between the pre-tax income distribution and the tax schedule. This paper presents a simple procedure useful for practitioners wishing to take into account pre-tax distributional differences before undertaking comparisons between tax schedules, in particular with regard to the analysis of tax reforms which will act on unknown pre-tax income distributions. This new approach is illustrated for the Italian PIT case, according to the comparison of the 2005 tax reform versus the 2000 tax law.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
