Making taxes fairer for the poor makes them less fair for people with the same income

Tax systems in developing countries routinely make people with the same income pay different amounts, depending on how they work. It turns out that trying to make richer people pay more taxes only makes this other unfairness worse.

Governments often try to make tax systems more progressive, meaning richer people pay a higher share. This paper shows that these efforts often create a different kind of unfairness: people earning the same amount end up with different tax bills. This means tax policy has a built-in trade-off that is hard to escape, and citizens notice it.