№ 2017/3
MacroeconomicsMERKULOVA Tamara 1, IANTSEVICH A. -2
1Kharkiv Karazin National University
2Kharkiv Karazin National University
Impact of progressive taxation on inequality: analyzing the inequality dependence on income distribution parameters and tax progression
ABSTRACT ▼
The article presents an investigation of the direct influence of progressive tax on income distribution and inequality. The case of lognormal distribution and a tax power function is considered. The coefficient Gini is applied to measure income inequality. It is shown that given progressive tax function doesn’t change the initial income distribution law: it will be lognormal with parameters depending on initial distribution parameters, tax progression and non-taxable income. The obtained mathematical dependences allow analyzing each pa-rameter’s influence on net income distribution and reducing inequality. It is found out that the dependence of Gini coefficient on tax progression is linear if the distribution parameter is a small values (a distribution has a small dispersion), and non-linear at big values. The applications of the obtained theoretical findings are presented with a case study on Ukraine
Keywords: progressive income tax, lognormal distribution, income inequality, Gini coefficient.
JEL: D31, C46
Article in Russian (pp. 23 - 38) | Download | Downloads :514 |
Article in Ukrainian (pp. 23 - 38) | Download | Downloads :456 |
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