Household needs must be taken into account when designing an equitable income tax. If the equivalence scale is income dependent it is not transparent how to achieve equity. In this paper we explore the question of horizontal equity and the implications for progression (vertical equity), when the...

The Gini coefficient has long been thought unsuitable for inequality decomposition analysis because of a troublesome and little-understood residual term that occurs when subgroup income ranges overlap after the between-groups and within-groups contributions to inequality have been separated out....

Decomposing the post-tax Gini coefficient across groups of pre-tax equals reveals the separate contributions to the redistributive effect of an income tax of (1) the effective schedule (the vertical effect), (2) the unequal treatment of equals arising from departures from this effective schedule...

A simple labor supply model with Cobb-Douglas preferences, lognormally distributed wage rates, and dual-rate negative income taxation is used to reexamine W. Breit's (1974) illustration of how society's chosen combination of inequality and output can be explained. This explanation is shown to be...

Income taxation typically has an inequality-reducing impact. This would be explained by theory were it the case that all income units were taxed according to a common progressive schedule. But this is not so; we lack a theoretical explanation for the observed finding. This paper explains how...

Three 'I's of poverty curves, based on distributions of poverty gaps, provide evocative graphical summaries of the incidence, intensity, and inequality dimensions of poverty, and a means for checking for unanimous poverty orderings according to a wide class of poverty indices. The orderings may...