The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Progressive and Regressive Taxation

  • William Vickrey
  • Efe A. Ok
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1805

Abstract

Progressive (resp. regressive) taxation refers to a taxation scheme in which the amount of tax paid as a proportion of the tax base rises (resp. declines) with that base. While progressive taxation has been justified in terms of the ‘principle of equal sacrifice’ and mitigating the inequality of market outcomes, no general political theory of income taxation provides theoretical support for the observed prevalence of progressive taxation schemes. Nor has the theory of optimal income (and consumption) taxation shed any light on the nature of progressive taxation, either normatively or positively.

Keywords

End-point theorem Equal sacrifice principle Equity–efficiency trade-off Income mobility Jakobsson–Fellman Theorem Lorenz curve Mixed strategy equilibrium Optimal taxation Progressive and regressive taxation Redistribution of income and wealth Reynolds–Smolensky progressivity index Tax base Tax burden Tax incidence 

JEL Classifications

H2 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • William Vickrey
    • 1
  • Efe A. Ok
    • 1
  1. 1.