Title: Skewness, Tax Progression, and Demand for Redistribution
Other Titles: Evidence from the UK
Authors: Pogorelskiy, Kirill
Traub, Stefan  
Issue Date: 2017
Document Type: Article
Journal / Series / Working Paper (HSU): Discussion paper series / Centre for Research in Economic Theory and Applications 
Volume: 29
Abstract: 
We introduce a skewness-based approach to measure tax progression and demand for redistribution. Adapting a novel, quantilebased statistical measure of skewness to right-skewed income distributions, we uncover its political economy foundation, by simultaneously relating the same measure to the classical model of income redistribution due to Meltzer and Richard (1981), to the Prospect Of Upward Mobility (POUM) mechanism due to B`enabou and Ok (2001), and to the progressivity of a tax schedule. In an empirical analysis of UK income distributions in 1979 – 2013, we find that skewness has increased over time, with the rich moving further away from the median. While the magnitude of the increase has remained small enough so that observed redistribution (or lack thereof ) could be consistent with POUM hypothesis, more recent periods show an increase in tax progression.
Organization Units (connected with the publication): Volkswirtschaftslehre, insb. Behavioral Economics 
DOI: 10.2139/ssrn.2958128
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