Redistribution and equity of polish personal income tax: measurement using micro data from tax returns
The redistribution effect of taxation is widely analyzed in literature. General findings could be summarized as follows: actual redistribution depends both on construction of tax schedule and unintended effects, such as reranking of incomes, caused by taxation. To separate both components, several decompositions of redistribution index have been described. In this paper, authors analyze decomposition proposed by Kakwani and Lambert (1998), who describe three principles of tax equity and three related measures of inequity. Authors apply outcomes of this decomposition in quest for the equivalence scale that implicitly results from the construction of tax system. Taking into account decomposition outcomes and the implicit equivalence scale found, we try to assess inequity of Polish income tax system in the context of its welfare consequences. All analyses are made basing on data from revenue offices and Central Statistical Office. Keywords: decomposition of redistribution index, welfare, taxation.