Description

The Suits index of a public policy is a measure of tax progressiveness, named for economist Daniel B. Suits. Similar to the Gini coefficient, the Suits index is calculated by comparing the area under the Lorenz curve to the area under a proportional line. For a progressive tax, the Suits index is positive. A proportional tax has a Suits index of zero, and a regressive tax has a negative Suits index. A theoretical tax where the richest person pays all the tax has a Suits index of 1, and a tax where the poorest person pays everything has a Suits index of −1. Tax preferences also have a Suits index.