Bankruptcy rules and progressive taxation

• Autores: Juan D. Moreno-Ternero, Antonio Villar
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 15, 2002
• Idioma: inglés
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• Resumen

  • This paper explores the relative progressivity of the main bankruptcy rules in taxation problems. A rule F is more progressive than a rule G when the after-tax income vector generated by F Lorenz dominates that generated by G. We focus our analysis on four classical rules (proportional, equal-awards, equal-losses and Talmud) and on the TAL-family, introduced in Moreno-Ternero & Villar (2002). This family depends on a parameter Theta belongs to [0,1] and encompasses the constrained equal awards rule, the constrained equal losses rules and the Talmud rule.