TY  - RPRT
        AU  - Duncan, Denvil
AU  - Peter, Klara Sabirianova
        TI  - Unequal Inequalities: Do Progressive Taxes Reduce Income Inequality?
        PY  - 2012/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 6910
        UR  - https://www.iza.org/index.php/publications/dp6910
        AB  - This paper analyzes the effect of changes in structural progressivity of national income tax systems on observed and actual income inequality. Using several unique measures of progressivity over the 1981-2005 period for a large panel of countries, we find that progressivity reduces inequality in observed income, but has a significantly smaller impact on actual inequality, approximated by consumption-based GINIs. We show empirically that the differential effect on observed vs. actual inequality is much larger in countries with weaker legal institutions. Substantial differences in inequality response to changes in top vs. bottom rates are also uncovered. The paper discusses implications of these results for flat tax policies.
        KW  - personal income tax
KW  - Gini
KW  - income inequality
KW  - structural progressivity
KW  - tax evasion
        ER  -