A Generalization of the Pfähler-Lambert Decomposition

Authors

Jorge Onrubia, Universidad Complutense de MadridFollow
Fidel Picos, Universidade de VigoFollow
Maria del Carmen Rodado, Universidad Rey Juan CarlosFollow

Document Type

Working Paper

Publication Date

2013

Abstract

The aim of this paper is to provide a generalization of the Pfähler (1990) and Lambert (1989, 2001) decomposition, which allows us to overcome some limitations of the original methodology. In particular, our proposal avoids the problem of sequentiality when the tax has several types of deductions or allowances, schedules or tax credits. In addition, our alternative decomposition is adapted to the dual income class of tax structures. Moreover, in order to adapt this methodology to real-world taxes, our approach includes the re-ranking effects of real taxes, caused by the existence of differentiated treatments based on non-income attributes. This theoretical proposal is illustrated with an empirical analysis for the Spanish Personal Income Tax reform enforced in 2007.

Comments

International Center for Public Policy Working Paper Series #1301, Andrew Young School of Policy Studies, Georgia State University.

Recommended Citation

Onrubia, Jorge; Picos, Fidel; and del Carmen Rodado, Maria, "A Generalization of the Pfähler-Lambert Decomposition" (2013). ICEPP Working Papers. 32.
https://scholarworks.gsu.edu/icepp/32