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- Title
Flat rate taxes and relative poverty measurement.
- Authors
Thompson, Brennan
- Abstract
We provide a systematic analysis of the impact of revenue-neutral changes to the parameters of a flat rate tax system on the level of relative poverty (where the poverty line is some fraction of either the mean or the median post-tax income level). We also perform a similar analysis for a negative income tax system. We find that the choice of poverty line type has important consequences in respect of how changes to the tax parameters affect the level of relative poverty. Our results are illustrated with a numerical simulation, in which we allow the pre-tax income distribution to be either given exogenously or determined endogenously.
- Subjects
POVERTY; FLAT-rate income tax; FLAT rates; NUMERICAL analysis; MATHEMATICAL analysis
- Publication
Social Choice & Welfare, 2012, Vol 38, Issue 3, p543
- ISSN
0176-1714
- Publication type
Article
- DOI
10.1007/s00355-011-0537-2