A NOTE ON THE EXISTENCE OF PROGRESSIVE TAX STRUCTURES

This paper studies the possibility of progressive income taxation of h eterogeneous populations. While a result due to Moyes and Shorrocks (1 994) indicates that there does not exist a universally inequality-redu cing tax structure which distinguishes between at least two subpopulat ions (in the sense of applying a different tax function to each subcla ss), it is shown here that a minimal refinement of the universality of inequality reduction leads one to a possibility conclusion. Informall y stated, we prove the existence of uncountably many differentiated ta x structures which are strictly progressive almost everywhere.