GLOBAL TAX PROGRESSIVITY

The article is concerned with how to choose an appropriate summary measure of tax progressivity. Knowing the relevant properties of a global index is important because the answer one gets is, in general, dependent on the choice of an index. Some properties of summary measures are proposed and their consequences are investigated. The starting point of the analysis is a local measure, namely, the residual income progression. For a given distribution of before-tax income, the global indices that are suggested assess the average progressivity, that is, the average degree of progression. The characterization of two families of progressivity indices are presented. Furthermore, one index the geometric mean of the local measures of progressivity, is proposed and characterized. It possesses attractive properties. Finally, distributional considerations (i.e., distributional weights) are taken into account.