PERSONAL INCOME TAXATION AND THE PRINCIPLE OF EQUAL SACRIFICE REVISITED

This paper shows that, in the domain of piecewise linear statutory inc ome tax functions, the principle of equal sacrifice implies tax progre ssivity. The progressivity implication of the doctrine is, in fact, st ronger: the equal sacrifice principle, in essence, characterizes margi nal rate progressivity, a result which is in sharp contrast with the s tandard literature on public finance. We also apply our findings to th e personal statutory income taxation practices of the OECD countries a nd observe that the United States and Turkey were the only ones violat ing the principle of equal sacrifice in the time period 1988 to 1991.