Progressive Taxation

The Albanian Government has announced that to revive the economy, it will apply a progressive tax policy over the taxable income. The previous tax system that has been in force since 2008 has been using mostly a flat/proportional tax rate, which is a constant tax percentage of income, used to calculate the income tax that every individual or business entity is charged. The newly approved fiscal reform is based on progressive tax rate for corporate taxes and personal income taxation, and maintains the same Value Added Tax (VAT). By collecting thoughts of different authors regarding the issue, this paper attempts to analyze the pros and cons of the two taxation policies in the world, and to make some assumptions on whether the new taxation policy will contribute to the Albanian economic growth in the upcoming years.
Keywords: flat, progressive tax, Albania, economic growth, income, inequality.

Progressive Taxation and Welfare State in Denmark and Spain: Lessons for Georgia
წინამდებარე ნაშრომში, ორი ევროპული სახელმწიფოს, დანიისა და ესპანეთის გამოცდილებაა გაანალიზებული პროგრესულ გადასახადებთან მიმართებაში. პროგრესული გადასახადების შესახებ ეკონომისტთა მოსაზრებები პოლიტიკური პრეფერენციების მიხედვით  პირობითად ორ ნაწილად არის დაყოფილი. მემარჯვენე ნეოლიბერალი მოაზროვნეები მიიჩნევენ, რომ პროგრესული გადასახადები  ამცირებს ეკონომიკურ ზრდას, მნიშვნელოვნად ზრდის არაფორმალური ეკონომიკის წილს მშპ-ში და ზრდის უმუშევრობის დონეს. მემარცხენე ავტორთა აზრით კი - პროგრესული გადასახადები ზრდის საერთო მოთხოვნას ეკონომიკაში, ამასთან ერთად ამცირებს უთანასწორობას და სიღარიბეს. არსებობს ე.წ. შუალედური პოზიციაც, რომელსაც იზიარებს საერთაშორისო სავალუტო ფონდის უმაღლესი რანგის წარმომადგენლები. მათი მოსაზრებით, პროგრესული გადასახადები, მართლაც არის მნიშვნელოვანი ინსტრუმენტი უთანასწორობის შემცირებისთვისა და სახელმწიფო სოციალური დაცვის მექანიზმების ეფექტური მუშაობისთვის. თუმცა, პროგრესული გადასახადების მაღალმა დონემ, შესაძლოა დაამუხრუჭოს ეკონომიკური ზრდა. შესაბამისად, ამ პოზიციის მიხედვით, მთავარი საკითხი უნდა იყოს არა ის თუ ზოგადად გვჭირდება თუ არა პროგრესული გადასახადი, არამედ ამ გადასახადის სიდიდე და ადეკვატურობა ქვეყნის ეკონომიკურ განვითარებასთან.1
დანიისა და ესპანეთის კეთილდღეობის დონესთან დაკავშირებული  ისეთი მაჩვენებლების შედარება, როგორიცაა უმუშევრობა, სიღარიბე და უთანასწორობა, ნათლად გვიჩვენებს, რომ მაღალი  პროგრესული გადასახადების არსებობა, სულაც არ იძლევა ერთგვაროვან სურათს. მიუხედავად იმისა, რომ ამ ორი სახელმწიფოს საშემოსავლო გადასახადების პროგრესულობა,  ფაქტიურად ყველაზე მაღალია
                                                         
1Fiscal Policy and Income Inequality, https://www.imf.org/external/np/speeches/2014/031314.htm
ევროპაში, შემოსავლების  განაწილების მხრივ მათ შორის საკმაოდ დიდი სხვაობაა. წინამდებარე დოკუმენტიც მიზანიც, სწორედ ის არის რომ გაანალიზოს ის ფაქტორები, რომლებიც გვევლინებიან ერთნაირი საგადასახადო პროგრესულობის პირობებში, განსხვავებული ეკონომიკური შედეგების გამომწვევ (ან გავლენის მომხდენ) მიზეზებად. 
ტექსტის პირველ ნაწილში მიმოხილულია ზოგადი ცნობები პროგრესულ საგადასახადო სისტემასთან და თანამედროვე გლობალიზებულ მსოფლიოში მის აღსრულებასთან დაკავშირებული პრობლემები. მეორე თავში მოცემულია ინფორმაცია დანიასა და ესპანეთში პროგრესული გადასახადების სიდიდის შესახებ. მესამე თავი მიმოიხილავს დანიასა და ესპანეთში უთანასწორობასთან, სიღარიბესთან და უმუშევრობასთან დაკავშირებულ საკითხებს. მეოთხე თავში კი  გაანალიზებულია ის ფაქტორები, რომლებიც შესაძლოა ახდენდნენ განსხვავებული ეკონომიკური სურათის დეტერმინირებას, ერთი დონის პროგრესული გადასახადების არსებობის პირობებში. დოკუმენტის დასკვნით ნაწილში მოკლედ არის განხილული, ის თუ რა გაკვეთილი შეიძლება გამოიტანოს საქართველომ ამ  ორი ქვეყნის გამოცდილებიდან პროგრესული საგადასახადო სისტემის დანერგვასთან მიმართებაში

Income inequality has become one of the more widely debated social issues today. The current article explores the role of progressive taxation in income inequality and happiness. Using historical data in the United States from 1962 to 2014, we found that income inequality was substantially smaller in years when the income tax was more progressive (i.e., a higher tax rate for higher income brackets), even when controlling for variables like stock market performance and unemployment rate. Time lag analyses further showed that higher progres- sive taxation predicted increasingly lower income inequality up to 5 years later. Data from the General Social Survey (1972–2014; N  59,599) with U.S. residents (hereafter referred to as “Americans”) showed that during years with higher progressive taxation rates, less wealthy Americans—those in the lowest 40% of the income distribution—tended to be happier, whereas the richest 20% were not significantly less happy. Mediational analyses confirmed that the association of progressive taxation with the happiness of less wealthy Americans can be explained by lower income inequality in years with higher progressive taxation. A separate sample of Americans polled online (N  373) correctly predicted the positive association between progres- sive taxation and the happiness of poorer Americans but incorrectly expected a strong negative association between progressive taxation and the happiness of richer Americans.

Over the course of more than a generation of vibrant and mostly uninterrupted electoral democracy, Latin American governments have done almost nothing about the fact that the region suffers from the highest levels of inequality, on average, in the world. On the spending side, what little has been done has been quite innovative, and this has brought new attention to redistribution through programs such as conditional cash transfers and universal noncontributory pensions, which have been credited by some with a small but measurable improvement in equality in several countries since about 2000. But taxation across the region is still generally regressive, relying greatly on revenue from consumption taxes and (with a handful of minor exceptions) hardly at all on revenue from personal income taxes. The long coexistence in the region of elected governments, enormous inequality, and inattention to progressive taxation ought to puzzle us—and not just because it directly violates the expectations of the most widely cited model of the political economy of taxation.

However, more recently, and especially since the Uruguayan tax reform of 2006, some policymakers have in fact begun to consider what might be done on the revenue side of the ledger to address inequality. The Chilean tax reform of 2014 is the best example. Still, progressive tax
measures have faced a variety of obstacles, as we discuss in more detail
below, including the doubts of some experts and practitioners about their effectiveness or political feasibility. Hence the questions: What kinds of reforms would be economically efficient, effective at redistribution, and politically possible? And what conditions and strategies might be most conducive to such reforms?

This book seeks to answer these questions, in pursuit of two objectives. The first is to update the literature on tax reform in Latin America by focusing on how progressive tax reforms take place, with special reference to important recent examples of success and failure in this regard. The second is to glean advice for reformers, drawn from the same literature and examples, emphasizing factors that are within the control of policymakers. The literature on tax reform in the region has produced a large volume of work on the optimal design of reform from an economic and administrative standpoint. But much less has been done on the determinants of reform, especially on the success or failure of progressive tax initiatives.

Since independence, Georgia has experimented with neoliberal economic reforms. One of them is the current flat income tax system. While positive economic outcomes are unclear, it continues to widen the gap between rich and poor. At the same time, unemployment and poverty rates have remained high in Georgia.

Sarah Godar, Tato Khundadze and Achim Truger address these challenges in their latest publication “Striving for Shared Prosperity”. The title of their study is programmatic: the authors propose a progressive income tax reform with increased public expenditures on human capital and industrial development which could mitigate the high level of income inequality and improve the life conditions of lower income groups.

We explore the relationship between democratic transitions and redistributive policies, focusing on taxation. The Spanish case is analyzed as an example of democratization accompanied by tax reform. But did it effectively change the distribution of the tax burden?

A tax incidence analysis for the years 1970, 1982 and 1990 (imputation of tax payments) provides the first long-term homogeneous set of results to assess the evolution of progressivity and redistribution in the country.

Classical political economy theory predicts an increase in redistribution after democratization (Meltzer and Richard, 1981). This paper rejects this hypothesis for the tax system in Spain, on the contrary positing a nuanced image of the transition, in line with Acemoglu et al. (2013); Boix (2003) and Albertus and Menaldo (2014).

A progressive new data transmission tax based on transacted digital transmissions, is a societal requirement which might be deployed to finance the policies and programmes required to address climate change it's mitigation and resilience. The digital economy has been offered unfair economic advantage, (as it acts beyond many regulatory constraints imposed on other traditional physical activities), energy consumption in the sector is spiralling, regulation of the digital economy is deficient and tax capture is low.
How this maybe redressed is advanced by considering that a byte of digital information has measurable energy when transacted.

Abstract Recent scholarship argues that progressive taxation, characterized by high tax rates for up- per income groups, played a significant role in reducing income inequality for much of the twentieth,century. Moves away,from tax progressivity may,likewise help explain the recent increase in inequality observed,in some,countries. But what,factors made,progressive taxa- tion politically sustainable in the first place? For scholars in political economy, a common answer,to this question is to refer to the role played by the expansion,of the suffrage and by the development,of political parties that mobilize working,class groups.,We propose,a different explanation,that emphasizes,how participation in mass,warfare created demands,for increased tax progressvity as a means,of ensuring equal sacrifice between,those who,fought and,those with high incomes.,We then show,empirically that over the last century,mass mobilization,for war has been associated with a notable,increase in tax progressivity.,In the absence of war neither the establishment of universal suffrage, nor the arrival of political control by parties of the Left is systematically associated with increased tax progressivity. In making,these arguments,we,devote particular attention,to a "difference-in-differences" comparison,of participants and non-participants in World War I. Those who,have made,fortunes out of the war must,pay for the war; and Labour

Progresiviteti dhe zgjerimi i bazës për tatimin në burim Progresiviteti dhe zgjerimi i bazës për tatimin në burim Kur individit i mbahen para në formën e tatimit në burim nga pagesa që merr, ai në fakt po i jep qeverisë një hua pa interes. Në këtë mes nuk ka rëndësi vlera, por interesi personal, i cili ndikon në qasjen për të qenë një tatimpagues korrekt. Mbajtja në burim e tatimit i mundëson qeverisë të marrë një shumë të ardhurash të qëndrueshme në kohë, por dhe me kosto të ulët, pasi punëdhënësit dhe bizneset zakonisht e paguajnë tatimin mbi baza mujore dhe kjo e bën më të mundshme që ata të jenë në gjendje të paguajnë tatimet. Kjo gjithashtu do të thotë që më pak njerëz mund të shmangin tatimin qëllimisht, pasi paratë merren direkt nga pagat e punonjësve apo u mbahen individëve që kryejnë një shërbim, por me një pjesë sa 15% e pagesës së plotë (pagesa bruto). Tatimi në burim mund të garantojë gjithashtu shmangien e tatimeve nga jorezidentët 1. Shpesh nivelet e tatimit në burim për këtë kategori tatimpaguesish përcaktohen në marrëveshjet e eleminimit të tatimeve të dyfishta midis vendit pritës dhe vendit ku është regjistruar si tatimpagues individi, duke tejkaluar çdo normë të përcaktuar në legjislacion. Ky diskutim përmendet këtu thjesht pët të treguar shtrirjen e tatimit në burim, por nuk është objekt i analizës, për arsye se vlen për trajtim më vete dhe dhe pse nevojitet të dihet impakti përfitues nga marreveshjet. Përdorimi i tatimit në burim krijon mundësi për mashtrim tatimor për ata idividë që deklarojnë të ardhurat vjetore dhe tatimet mbi to, pasi mbajtësi ligjor i tatimit mund të ketë të drejtën e një rimbursimi të taksës edhe nëse nuk është mbajtur asnjë tatim në burim. Ndërsa ky është një problem 1 të huajt që punojnë dhe përfitojnë të ardhura më Shqipëri Tatim mbi pagën Tatim mbi honoraret Tatim mbi shpërblimet Tatim mbi qeranë Tatim mbi interesat Tatim mbi te drejte autori Tatim mbi sherbime Tatim dividenti 0% 13% 23% Tatimi mbi punën 8% 15% Tatimi mbi kapitalin

The present paper is a brief overview of the introduction of goods and services tax (GST), a progressive tax system and its impacts in India. GST is an indirect taxation that merged multiple taxes into a single tax system. It will eliminate cascading effects and generate revenue for both central and state government. Composition of GST as central goods and services tax (CGST), state goods and services tax (SGST), and integrated goods and services tax (IGST) projects scientific and transparent indirect tax system in India. GST is going to reduce tax leakage and prevent corruption in pricing of products. To implement and control such technology based taxation system since independence, IT industry acts as spinal cord. GST emerged as service based consumption oriented tax in India. Concept of GST, formation of GST council, positive and negative impacts on economy especially on Indian business, foreign investment of the GST are addressed in this study. To present the study, descriptive type of research design on the basis of secondary data is applied. This is a modest attempt to forecast the after effect of GST in India.

Any liberal theory that would take seriously the question of equality before the law is bound to engage with discrimination-related matters, and so long as one is a liberal one should oppose all discrimination coming from the state. This, however, may be a double-edged sword since many classical liberals have quite readily opposed progressive taxation by invoking its discriminatory nature. Some liberals will therefore conclude that one cannot establish different tax brackets, lest taxation be illiberal. This paper endeavours to refute this assumption. Progression may be compatible with the classical liberal concern for the rule of law, provided legislative discretion on tax-related matters is duly limited by the principle of generality, as well as by a certain standard of reasonable lawmaking. Through a careful distinction between four concepts of differential treatment, this paper demonstrates that progressive tax arrangements do not necessarily discriminate against the well-off, and that it can efficiently fulfill some legitimate classical liberals objectives.

This study analyzes the distribution of frequency and income share of four direct taxes among Brazilian households – property tax, vehicle tax, personal income tax on labor income, and social contributions – per income and geographical strata, based on the last two Household Budget Surveys of 2008-2009 and 2017-2018. The study found that property tax and labor income tax are progressive up to the 1% richest, which starts to decrease their ratio on household income. Vehicle tax and social contributions are regressive, mainly due to the recent increase of vehicles ownership among the poorer and the ceiling of the general social contributions among income above six minimum wages, respectively. Finally, this study makes some proposes to the tax reform to enhance progressivity.

Tatimet janë pjesa e padiskutueshme e procesit të rishpërndarjes dhe uljes së pabarazisë kur ato janë progresive. Kur flasim për progresivitet taksimi natyrisht që përfshihet zakonisht tatimi mbi të ardhurat nga puna dhe kapitali. Në argumentim të këtij pohimi pyetja kryesore që lind me të drejtë është se pse e ul pabarazinë e të ardhurave tatimi progresiv, nëse flasim jo vetëm për tatimet mbi të ardhurat personale por edhe për tatimet e tjera të sistemit tatimor? Një përgjigje e parë është e lidhur me mënyrën se si konceptohet dhe ndërtohet sistemi tatimor me mekanizmat e tij të taksimit, të shprehura nga njëra anë nëpërmjet politikës, por nga ana tjetër nëpërmjet zbatimit të saj, që vlen të përmendet për vende me administrim problematik dhe të ngacmuar nga korruptimi. Në aspektin e politikës së taksimit, mënyra se si taksimi progresiv ul pabarazinë e të ardhurave gjendet te thelbi i progresivitetit si instrument, me rritjen e shkallëve tatimore rritet edhe taksimi mesatar në të njëjtin nivel me rritjen e të ardhurave. Me fjalë të tjera, kjo do të thotë që politika fiskale e përshtat taksimin mbi të ardhurat sipas të ardhurave të individit. Por, kur flasim për të ardhurat nga puna nuk mund të lësh mënjanë diskutimin për përfshirjen ose jo në sistemin progresiv të taksimit edhe të kontributeve të sigurimeve. A duhet dhe mundet të përfshihen edhe kontributet e sigurimeve në skema taksimi progresiv? Edhe pse kontributet nuk emërtohen në legjislacion si taksa, nisur nga fakti shumëvjeçar që ato janë të detyrueshme për tu paguar njësoj si taksat mbi të ardhurat personale, mbi të njëjtën të pagë, i vetmi element që i ndan nga taksat është sistemi i përfitimeve. Kur përmenden përfitimet, në rast se bëjmë një ndarje midis elementëve të shumtë të përfitimeve nga skemat që zbatohen në vend, të vetmet që lidhen me përjashtime nga rregulli i progresivitetit në taksim janë pensionet që do të paguhen në të ardhmen nga kjo pagesat aktuale të kontributeve. Në gjithë këtë mund të kuptojmë që taksimi progresiv nuk mundet të zbatohet dot në mënyrën e drejtë për të cilën ai dizenjohet, pasi pagesat e larta të kontributeve nuk mund të jenë pjesë e progresivitetit, pasi ato ndikojnë direkt në zinxhirin e rishpërndarjes së të ardhurave për të ardhmen e individit. Nga ana tjetër, të ardhurat e kontributeve nuk rishpërndahen për konsum publik apo të përdoren për qëllime të tjera, përtej atyre që garanton ligji për to. Por, në rast se politika fiskale nuk takson burimet e ndryshme të të ardhurave të individit, atëherë vetë sistemi i taksimit progresiv kthehet në një instrument të mangët që nuk mund të arrijë dot qëllimin për të cilin është dizenjuar. Për rastin e Shqipërisë, me qëllim që të mos krijohen probleme me zbatimin korrekt të taksimit progresiv vlen të ndiqet modeli progresiv i taksimit të të ardhurave nga kapitali në shkallë taksimi më të ulëta se të ardhurat nga puna. Një logjikë taksimi progresiviteti në favor të kapitalit është ngushtësisht e lidhur me rishpërndarjen e të ardhurave, të cilat në rastin e investimeve shpërndahen në mënyrë më të pabarabartë se të ardhurat nga puna. Nëse taksimi mbi kapitalin do të ishte më efektive të kishte shkallë taksimi më të ulta se taksimi mbi punën, po për shkallët e taksimit mbi pagat dhe të ardhurat individuale a duhet që të ketë një " pjerrësi " jo shumë të madhe që në tërësi prek më shumë shkallët në fillim dhe në majë të sistemit progresiv? Përvoja e disa viteve zbatim të taksimit progresiv në Shqipëri (nga fillimi 2014), tregon një fakt se një rritje e shkallës në majë të sistemit progresiv të taksimit mbi të ardhurat nga puna ka dhënë një ndikim për ngushtim të bazës së individëve që duhet ti përkasin kësaj shkalle taksimi dhe në vetvete edhe si një

In this article I maintain that a progressive and leftist carbon tax should be revenue-neutral through a dual policy package: first, it should use some revenues to offset price increases for the poor and middle classes; second, it should use the remaining part of revenues to lower taxes on labour income (both employed and self-employed income) for those below a middle-income threshold. I will briefly examine three reasons why such a revenue-neutral and dual-package carbon tax (RN-DP-CT) could (and should) become central in the political agenda of the European Left – even though much of what I will suggest can reasonably hold also with respect to other countries. First, the tax wage on labour in the euro area is one of the highest in the world. Second, the revenue-neutral and dual policy package carbon tax will tax more capital that yields income without a proportional increase in labour demand, rather than capital that creates new job opportunities. Third, we live in societies that are highly unequal, hence I see no moral reason why a carbon tax reform should not aim, among other things, to take wealth away from the richest.

Politica fiscal-bugetară nu este doar acea componentă a mix-ului de politici economice prin care sunt asigurate resursele bugetare necesare furnizării bunurilor și serviciilor publice, ci și o pârghie importantă, dacă este proiectată și aplicată în mod adecvat, de stimulare a creșterii economice și de repartiție echilibrată a acesteia, în scopul asigurării concomitente a dezvoltării țării, promovării incluziunii sociale și reducerii sărăciei, fără afectarea stabilității financiare.
Astfel, studiul se axeaza pe analiza a 3 directii: i) politica fiscală – componentă esențială a mixului de politici economice, ii) nivelul foarte ridicat al disparitatilor sociale în România si iii) necesitatea modernizarii sistemului fiscal, conform modelului european.
Analiza arata ca că progresele înregistrate pe linia creșterii transparenței cheltuielilor publice se impun a fi însoțite de îmbunătățirea substanțială a transparenței veniturilor și patrimoniului la nivel individual. Echilibrarea celor două laturi ale transparenței în cadrul bugetului statului asigură, în societate, o îmbunătățire a simetriei între libertățile și răspunderile individuale, raport care, în prezent, este în defavoarea răspunderii.
Dincolo de avantajele de ordin economic și social ale utilizării instrumentelor privind globalizarea veniturilor și declarația de patrimoniu, considerăm că acestea vor avea o influență pozitivă majoră asupra detensionării climatului social, prin creșterea încrederii între cetățeni – liant consistent al coeziunii și liniștii sociale.

Fiscal revenues collected by countries applying progressive taxation (Albania and Croatia) compared to the countries applying flat taxation (Kosovo, North Macedonia, Montenegro, Serbia, Bosnia and Herzegovina) are seen to have a higher burden with 2% of GDP. The tax model for capital and personal income is seen to have an impact on the burden of social and health contributions. Countries that implement progressive taxation have a burden of contributions on average for the five-year period 2014-2018 higher than those applying flat taxation by 4% more. So, between the two models there is a tax gap of 4%. If we compare tax rates between Western Balkans countries applying a progressively-scale tax on labor (Croatia, Albania) with flat tax-applying countries (North Macedonia, Montenegro, Kosovo, Serbia, Bosnia and Herzegovina) there is a significant gap between them regarding the burden that has been paid for the budget. Whereas, when comparing the average progressive tax rates with the flat ones, the gap between them is a 7.7% difference. This fact between the comparisons for the same model, which on the one side compares fiscal policies through tax rates (the 7.7% gap), and on the other side, the fiscal burden that has been paid to the budget (4% gap) shows that the administration is still working under the allowable capacity of fiscal legislation in the respective countries, which implies high presence of fiscal evasion. In the total fiscal burden, according to the graphs in the publication of ALTAX , it appears that countries with low productivity in collections of a constituent group of total fiscal burdens (eg social contributions, and other taxes in Kosovo) are offset by higher receipts from another component group (Indirect Taxes in Kosovo). Meanwhile, over 5 years the indirect tax burden is higher in the countries that apply flat taxation by + 6%. From various studies conducted for informality in the labor market in Balkan is always the concern of an informal labor market that changes and moves at slower pace than the forecasts and programs of Balkan governments.

This article examines the role of income status and policy context in jointly determining public responses to taxation policies. Based upon the notion that taxpayers’ self-interested preferences are inextricably intertwined with the policy context, I hypothesise that high-income taxpayers react differently to taxation policies depending on their perceived tax burden associated with tax policy structures. Using international social survey data, I find that the link between income and tax support is conditioned by the tax system within which taxpayers are contextually situated. In countries with comparatively high levels of direct taxes, high-income taxpayers react more negatively to higher and more progressive taxation than do low-income counterparts. In contrast, in low-tax societies, attitudinal cleavages among income classes become less intense. Moreover, the results reveal that the impact of income on tax attitudes does not significantly vary across countries with different degrees of tax concentration. The article concludes with a discussion of the implications of these findings and directions for further research.

In this paper we ask whether public intervention can improve the allocation of risk in an economy in which private financial markets do not provide full insurance. The answer depends crucially on the fundamental friction that limits private risk sharing in the first place. If risk sharing is limited because some insurance markets are missing for model-exogenous reasons (as in Ayiagari, 1994) publicly provided risk sharing (via a progressive tax system, say) always improves on the allocation of risk. If instead insurance markets exist but their use is limited by the absence of complete enforcement (as in Kehoe and Levine, 1993) then the provision of public insurance via a progressive income tax system can crowd out the provision of private insurance to such an extent that total consumption insurance is reduced. The idea is that with progressive taxation the government increases the value of being excluded from insurance markets and hence weakens the enforcement mechanism of private c...

This essay will attempt to look at the area of inherited wealth within the context of global justice. This is an important area for consideration as it will highlight the unjust nature of inheritance. An area of universal consensus in contemporary western society is the belief in equality of opportunity. However I contend that through unjust inheritance the elite in our society have an unfair advantage over the general population.

This paper explores the relative progressivity of the main bankruptcy rules in taxation problems. A rule F is more progressive than aruleG when the after-tax income vector generated by F Lorenz dominates that generated by G: We focus our analysis on four classical rules (proportional, equal-awards, equal-losses and Talmud) and on the TAL-family, introduced in Moreno-Ternero & Villar (2002). This family depends on a parameter µ 2 [0; 1] and encompasses the constrained equal awards rule, the constrained equal losses rules and the Talmud rule. JEL classi…cation numbers: D63

ABSTRACT Several countries have recently abolished or significantly reduced their taxes on bequests. Bequest taxes, on the other hand, were among the first to be introduced when modern systems of taxation were developed at the end of the nineteenth century. We propose an explanation for these facts which is based on a dynamic political economy model linking inequality, voting and redistribution. In an early stage, when voting is restricted and wealth is very unequally distributed, no bequest tax is imposed in a political equilibrium. Next, with democratization, taxation on bequests is introduced and gradu- ally expanded. In a final stage, the dynamics of the economic system induce a reduction of wealth concentration, which is further accelerated by the re- distributive impact of the bequest tax. The resulting political equilibrium will therefore support a reduced incidence, and eventually a phasing out, of the bequest tax. Our theory matches the observed evolution of bequest taxatio...

The present paper considers two types of models of interaction between a tax authority and a group of taxpayers. The first type of model assumes no corruption, and the strategy of the authority is the probability of auditing a taxpayer depending on his/her declared income and other available information. The purpose is to maximise the net tax revenue. The authors determine the optimal strategies for proportional and progressive taxation, assuming risk neutrality amongst taxpayers. The second type of model permits the bribing of an auditor by a taxpayer. The authors determine the optimal probabilities of audit and review by the tax authority and then study the comparative statics of net revenue with respect to the tax rate and penalties for poor auditing.

Two common principles in distributional analysis are that (i) a progressive transfer moves the Lorenz curve upwards, and (ii) progressive [neutral] taxation reduces [leaves unchanged] inequality. In order to establish these results it is currently assumed that the distribution of income is exogenously given. The relevance of these results is therefore limited in practice where incomes are determined by the