TY - JOUR
T1 - Dalton-improving tax reform
T2 - When households differ in ability and needs
AU - Mayshar, Joram
AU - Yitzhaki, Shlomo
PY - 1996/11
Y1 - 1996/11
N2 - In a previous paper we suggested a method for identifying tax reforms that adhere to Dalton's principle of transfers, approving a small enough transfer from 'rich' to 'poor'. However, even the weak requirement from that method, namely prescribing a uni-dimensional ordinal ranking of households by how deserving they are of a marginal income transfer, is confining. Here we extend the approach by formulating a two-dimensional criterion for a Dalton-improving tax reform, when there is social approval for transfers (when other things are equal) from the more able to the less able, and from less needy households to more needy ones. The possibility of applying this extended criterion in practice, and a comparison with other criteria, is carried out using the example of U.K. excise taxes.
AB - In a previous paper we suggested a method for identifying tax reforms that adhere to Dalton's principle of transfers, approving a small enough transfer from 'rich' to 'poor'. However, even the weak requirement from that method, namely prescribing a uni-dimensional ordinal ranking of households by how deserving they are of a marginal income transfer, is confining. Here we extend the approach by formulating a two-dimensional criterion for a Dalton-improving tax reform, when there is social approval for transfers (when other things are equal) from the more able to the less able, and from less needy households to more needy ones. The possibility of applying this extended criterion in practice, and a comparison with other criteria, is carried out using the example of U.K. excise taxes.
KW - Ability
KW - Dalton
KW - Needs
KW - Tax reform
UR - http://www.scopus.com/inward/record.url?scp=0030295695&partnerID=8YFLogxK
U2 - 10.1016/0047-2727(95)01566-3
DO - 10.1016/0047-2727(95)01566-3
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AN - SCOPUS:0030295695
SN - 0047-2727
VL - 62
SP - 399
EP - 412
JO - Journal of Public Economics
JF - Journal of Public Economics
IS - 3
ER -