PROGRESSIVITY, REDISTRIBUTION, AND EQUITY, WITH APPLICATION TO THE BRITISH TAX AND BENEFIT SYSTEM

We propose a general class of indices of horizontal inequity that comp lements existing classes of progressivity and vertical equity indices. The class of horizontal inequity indices can also correct for biases in measuring a general class of inequality measures. We illustrate our results using the 1985 British tax and benefit system, highlighting t he separate contribution of individual taxes and benefits to the overa ll indices of progressivity, vertical equity, horizontal inequity, and inequality reduction.