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Proponents of graduated-rate income tax systems tend to view them as a way to address income inequality, but researchincluding a study by Feldstein and Wrobel (1998)shows that higher marginal rates lead to a relocation of capital and higher earners to more favorable tax environments.[44] This not only undercuts the states efforts to expose high earners to higher taxes, but also reduces the income of lower-income individuals who remain, due to reduced opportunities and a less competitive economic environment

This study has a number of limitations, the first of which is the availability of the input data

doi: 10.13496/j.issn.1007-5119.2019.03.013 47 VuorinenI.HambergL.MllerM.SeiskariP.PennanenT

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