König, Johannes
Bias in tax progressivity estimates / Johannes König
Resumen.
Bibliografía.
Tax progressivity is central in public and political debates when questions of vertical equity are raised. Applied, structural research demands a simple way to capture it. A power function approximation delivers one parameter that captures the residual income elasticity — a summary measure of progressivity. This approximation is accurate, tractable, and interpretable, and hence immensely popular. The most common procedure to estimate this parameter, a log ordinary least squares specification, produces biased and inconsistent estimates. A nonlinear estimator solves this issue and, using different data sets, I find differences in estimates between 6 and 14 percent
IMPUESTOS
PROGRESIVIDAD
ELASTICIDAD IMPOSITIVA
National Tax Journal 0028-0283 v. 76, n. 2, June 2023, p. 267-289
Bias in tax progressivity estimates / Johannes König
Resumen.
Bibliografía.
Tax progressivity is central in public and political debates when questions of vertical equity are raised. Applied, structural research demands a simple way to capture it. A power function approximation delivers one parameter that captures the residual income elasticity — a summary measure of progressivity. This approximation is accurate, tractable, and interpretable, and hence immensely popular. The most common procedure to estimate this parameter, a log ordinary least squares specification, produces biased and inconsistent estimates. A nonlinear estimator solves this issue and, using different data sets, I find differences in estimates between 6 and 14 percent
IMPUESTOS
PROGRESIVIDAD
ELASTICIDAD IMPOSITIVA
National Tax Journal 0028-0283 v. 76, n. 2, June 2023, p. 267-289