On the equivalence between progressive taxationand inequality reduction

We establish the precise connections between progressive taxation andinequality reduction, in a setting where the level of tax revenue to be raised isendogenously fixed and tax schemes are balanced. We show that, in contrastwith the traditional literature on taxation, the equivalence between inequalityreduction and the combination of progressivity and income order preservationdoes not always hold in this setting. However, we show that, among rulessatisfying consistency and, either revenue continuity, or revenue monotonicity,the equivalence remains intact...