Individualism and tax progressivity

This article proposes a novel theoretical model that factors in individualism culture for explaining tax progressivity. It shows an increase the level of reduces optimal progressivity, regardless whether social planner or voters choose income schedule. Moreover, pre-tax inequality raises progressivity voters, any given individualism. These findings from introducing are quite original. makes important contribution providing explanation puzzling fact taxes some countries with low more progressive than those other high inequality. implies country can have highly if country’s features fairly Empirical analysis panel data 87 finds evidence supportive these findings.