This paper explores the use of a loglinear tax and transfer function, displaying increasing marginal and average tax rates along with a means-tested transfer payment. The two parameters are a breakeven income threshold, where the average tax rate is zero, and a tax parameter equivalent to the...

Extensive research has shown that few robust results regarding the optimal tax structure are available. Moreover, the stylised models used in optimal tax analyses are not appropriate for practical policy advice. This paper proposes a method of examining optimal marginal income tax reforms using...

Direct tax structures are regularly revised and public debates over changes are typically heated. This is not surprising when it is realized that tax changes usually involve losers as well as gainers. Also, taxes affect the behaviour of individuals and families in ways that are not easy to...

This paper provides an introduction to the concept of the elasticity of taxable income with respect to the net-of-tax rate. This elasticity aims to capture all potential responses to income taxation in a single elasticity measure, without the need to specify the nature of the various adjustment...

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This paper presents two ‘non-welfarist’ approaches and one ‘welfarist’approach to decompose changes in inequality and social welfare into three components. We distinguish the contributions of population,tax policy and labour supply behavioural effects. As an illustration,we decompose...

Ursula Hicks (nee Webb) is well known for her contributions to public finance and development economics, and in her role as founding editor of Review of Economic Studies. After a brief introduction to Ursula Hicks’s complex family background, this paper reproduces, with editorial material, the...

This paper considers the use of alternative welfare metrics in evaluations of income inequality in a multi-period context. Using Norwegian longitudinal income data, it is found, as in many studies, that inequality is lower when each individual’s annual average income is used as welfare metric,...

Francis Ysidro Edgeworth was a leading figure in the rapid development of economics during the last quarter of the 19th century and the first quarter of the 20th century, by which time it was firmly established as an academic subject. He held the Drummond Chair at Oxford and was regarded as...

There is now a large and complex literature on optimal income taxation, within the context of second-best welfare economics. This paper considers the potential role of this analysis in the practical design of direct tax and transfer structures. It is stressed that few results are robust, even in...