A New Global Measure of Tax Progressivity

The study proposes a new global measure of tax progressivity in terms of inequality indices of pre-tax income and tax defined on the basis of concept of equally distributed equivalent level of income. It is found invariant to tax scale. While the existing measures in this class are found more suitable as indicators of redistributive impact of the tax, the new measure seems more suitable as measure of tax prograssivity or graduation in the tax schedule. The new measure along with the average tax rate is found to help in understanding changes in redistributive impact of the tax. The study reveals the comparison of tax progressivity or redistribution impact over time or, across different tax schedules has to be associated with the measure of progressivity or the welfare function associated with the relevant inequality indices.