In a two-period macroeconomic model, consider two consumers with the following income profiles – one only wage earner and another only receiving dividend income (𝜋! > 0) – and suppose there is proportional wage tax and a lumpsum tax on the consumer receiving dividend income. If there is a tax rebate given to the second consumer while her/his income grows (∆𝑦! " > 0), will this violate the principle of the Ricardian Equivalence theorem?
SOURCE - Williamson, S. D. (2014). Macroeconomics (Fifth Edition). (Donna Battista, David Alexander, Christina Masturzo, Lindsey Sloan, Lisa Rinaldi, Emily Brodeur, & Jeffrey Holcomb, Eds.).