LIFETIME AND ANNUAL MARGINAL COSTS OF REDISTRIBUTION IN ENGLAND, SWEDEN, AND THE UNITED-STATES

Both the annual and lifetime marginal costs of redistribution (MCR) in England, Sweden, and the United States are calculated. The annual MCR is $2.90 in the United States, $3.53 in England, and $6.77 in Sweden. The lifetime MCR is $4.46 in the United States and $7.96 in England. The lifetime MCR in Sweden indicates that additional redistribution reduces the incomes of both the poor and non-poor. This study also shows that when there is greater income equality, the marginal tax rate at which the incomes of the poor and non-poor begin to be reduced will be at lower and lower levels.