The paradox of progressivity in low-tax countries: income tax in Guatemala / Santiago Díaz de Sarralde, Carlos Garcimartín and Jesús Ruiz-Huerta.

Format:

• Book
• Government document

Author/Creator:

• Díaz de Sarralde, Santiago, author.

Contributor:

• Garcimartín Alférez, Carlos.
• Huerta, Jesús R.- (Jesús Ruíz)

Language:

English

Subjects (All):

• Economic and Social Development.

Local Subjects:

• Economic and Social Development.

Physical Description:

1 online resource (15 pages)

Contained In:

CEPAL Review Vol. 2010, no. 102, p. 85-99 2010:102<85 1684-0348

Place of Publication:

[Place of publication not identified] : United Nations, 2011.

System Details:

text file

Summary:

The Kakwani and Reynolds-Smolensky indices are used to analyse the consequences of tax reforms in terms of a tax's progressivity and redistributive capacity. Nonetheless, these indices can only serve as a basis for normative judgments in reforms where revenue remains constant. As this is generally not the case with tax reforms in practice, the Reynolds-Smolensky index is usually broken down into changes in the average tax rate and changes in the Kakwani index. This article argues that this procedure has serious disadvantages, especially in countries with low levels of tax revenue. To help overcome these problems, a number of alternative indicators are proposed based on the traditional indices, to make it possible to analyse the redistributive and progressivity effects of reforms that generate changes in revenue. These indicators are then used to analyse hypothetical reforms to income tax in Guatemala.

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