TY  - RPRT
        AU  - FitzRoy, Felix
AU  - Jin, Jim
        TI  - Are Two Tax Rates Better than One?
        PY  - 2009/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 4167
        UR  - https://www.iza.org/index.php/publications/dp4167
        AB  - Should two-band income taxes be progressive given a general income distribution? We provide a negative answer under utilitarian and max-min welfare functions. While this result clarifies some ambiguities in the literature, it does not rule out progressive taxes in general. If we maximize total or weighted utility of the poor, as often intended by the society, progressive taxes can be justified, especially when the 'rich' are very rich. Under these objectives we obtain necessary conditions for progressive taxes, which only depend on aggregate features of income distributions. The validity of these conditions is examined using plausible income distributions.
        KW  - progressive tax
KW  - utilitarian
KW  - max-min
KW  - help the poor
        ER  -