Talk:Suits index

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Created page for Suits index. Comments are greatly appreciated. Perkinsms 20:32, 15 May 2007 (UTC)

Question - does the Suits index work strictly using income as the base for progressive measurement? Under sales, vat, or other consumption tax system - is the tax base of consumption used as the base or is income used as the base? Using income can create an arbitrary relationship. If a rebate or exemption system were used in a sales tax model, how does the Suits index rate it. For example, a excise on luxury items like a yatch. A rebate on sales purchases can create an progressive effective rate on consumption - so while 100% of income is consumed on taxable goods, they may pay a 0% tax rate. I'm asking as the current state of this article seems to base progressivity solely on an income base, which may or may not be accurate in the normal definition of progressivity. Is this a limit of the Suits index and what it is designed to measure or are we excluding factors in the index that sould be included that measure other means of tax incidence. Morphh ^(talk) 14:13, 16 May 2007 (UTC)

My guess is that unless the reporter of the Suits index (research paper author, etc.) says otherwise, the basis is economic income. I'm working to secure the original 1977 paper (I work near the library of congress) since I don't really want to pay $10 to download it. If I get my hands on the paper, the article will get much better. It should be noted that the Suits index can be used to estimate the progressivity of any public policy. I'm sure it would be possible if you had the data to calculate a Suits index for a consumption base, as it's just a matter of calculating areas under a Lorenz curve. Cheers. Perkinsms 19:52, 17 May 2007 (UTC)

Hi. I am trying to figure out the Kakwani index (Kakwani, Nanak C. 1977. Measurement of Tax Progressivity: An International Comparison. The Economic Journal, Vol. 87, No. 345, pp. 71-80) and compare it to the Suits (1977) index. I had a bit of trouble with the definition of Gini index in Kakwani's paper, which is related to his/her "concentration index". According to Kakwani, the Gini index is 1 - 2(area under Lorenz curve), whereas the more usual definition seems to be (area between Lorenz curve and line of proportionality/ total area under line of proportionality). I assume the total area under line of proportionality to be 1, so this would be (area between Lorenz curve and line of proportionality/1). Using his/her definition of Gini index, Kakwani goes on to describe a "concentration curve of taxes" which substitutes taxes for income: "Let us denote F₁[(T(x)] to be the proportion of taxes paid by the units having income less than or equal to x. Then the relationship between [the probability distribution of individual income x] and F₁[(T(x)] will be called the concentration curve of taxes... The concentration index is equal to one minus twice the area under the concentration curve". Kakwani defines his/her index as being C - G, where C is the concentration index and G is Kakwani's "Gini index". Is Kakwani's idea of a Gini index ok for describing progressiveness? 68.32.48.59 (talk) 15:40, 17 June 2008 (UTC)

Assessment comment

The comment(s) below were originally left at Talk:Suits index/Comments, and are posted here for posterity. Following several discussions in past years, these subpages are now deprecated. The comments may be irrelevant or outdated; if so, please feel free to remove this section.

==WP Tax Class== Start class because the content in general could use an expansion, if possible. Content using graphs would also be helpful.EECavazos 19:59, 13 November 2007 (UTC) ==WP Tax Priority== Mid priority because the article covers the theoretical/interpretative underpinings of taxation. It could go to high with expansion but not above that because likely to have little traffic.EECavazos 20:01, 13 November 2007 (UTC)

Last edited at 20:01, 13 November 2007 (UTC). Substituted at 07:15, 30 April 2016 (UTC)