Tax Inequality book cover

Tax Inequality

Effects of Taxation on Income Inequality

The problem is not income inequality, the problem is tax inequality. Income inequality is a natural condition; even the twins raised together have different incomes.

People have different capabilities and talents, grow up in different societies with different cultures, achieve different levels of education, and have different professions in different economic sectors. Nonetheless, they work in the same economy and the same country.

This book explains a new method to evaluate the fairness of income distribution. Income equality is better not be defined by only looking at the income levels of households―the income share from the gross domestic product (GDP) of a country. The household income share from GDP includes all type of taxes. Therefore, to make a fair income evaluation, the tax share on the household incomes should be taken into account―the tax burden share from the gross domestic Tax (GDT). The income equality definition in the book says, "Income equality in a country means households have same percentage share from GDP and GDT."

The tax burden is not only the tax on income (e.g. income tax, social security contributions, unemployment tax.) And, the tax on net income is not only sales tax or value added tax (VAT) much more is embedded into the price of products become households expenditures.

Hakan Kürşat Sertpoyraz

LIST of Figures

  1. Country K, Inequality in Household Shares of GDP (Income) and GDT (Tax)
    Figure 4-1
    Country K, Inequality in Household Shares of GDP (Income) and GDT (Tax)
  2. Country L, equality in household shares of GDP (income) and GDT (tax)
    Figure 4-2
    Country L, equality in household shares of GDP (income) and GDT (tax)
  3. GDP versus GDT, the percentage share curves of households
    Figure 4-3
    GDP versus GDT, the percentage share curves of households
  4. Cumulative graph of household shares of GDP (income) and GDT (tax)
    Figure 4-4
    Cumulative graph of household shares of GDP (income) and GDT (tax)
  5. Graph of entities' shares of income in GDP(profit) and tax in GDT(profit)
    Figure 4-5
    Graph of entities' shares of income in GDP(profit) and tax in GDT(profit)
  6. The flow of money in the economy
    Figure 6-1
    The flow of money in the economy
  7. Price life span (PLS) of product F and its business levels
    Figure 8-1
    Price life span (PLS) of product F and its business levels
  8. The GDP leverage of an entity (for three business levels)
    Figure 9-1
    The GDP leverage of an entity (for three business levels)
  9. The GDP leverage of an entity in a business level (for N business levels)
    Figure 9-2
    The GDP leverage of an entity in a business level (for N business levels)
  10. Household tax burden tree
    Figure 9-3
    Household tax burden tree
  11. Open-ended tax system
    Figure 13-1
    Open-ended tax system
  12. Open-ended tax system with a household bookkeeping system
    Figure 13-2
    Open-ended tax system with a household bookkeeping system
  13. Closed-loop tax system with a household bookkeeping system
    Figure 13-3
    Closed-loop tax system with a household bookkeeping system
  14. How the GDP-by-sales approach simulation model works―parameters and concept
    Figure C-1
    How the GDP-by-sales approach simulation model works―parameters and concept
  15. Accumulation of household expenditure tax in costs and on sales (CST)
    Figure E-1
    Accumulation of household expenditure tax in costs and on sales (CST)
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