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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)
