Tax-benefit revealed social preferences

Publication type

Journal Article

Authors

Publication date

March 15, 2012

Summary:

This paper inverts the usual logic of applied optimal income taxation. It starts from the observed distribution of income before and after redistribution and corresponding marginal tax rates. Under a set of simplifying assumptions, it is then possible to recover the social welfare function that would make the observed marginal tax rate schedule optimal. In this framework, the issue of the optimality of an existing tax–benefit system is transformed into the issue of the shape of the social welfare function associated with that system and whether it satisfies elementary properties. This method is applied to the French redistribution system with the interesting implication that the French redistribution authority may appear, under some plausible scenario concerning the size of the labor supply behavioral reactions, non Paretian (e.g. giving negative marginal social weights to the richest class of tax payers).

Published in

The Journal of Economic Inequality

Volume and page numbers

Volume: 10 , p.75 -108

DOI

http://dx.doi.org/10.1007/s10888-010-9153-0

ISSN

15691721

Subjects

Notes

Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*


Related Publications

#521792

News

Latest findings, new research

Publications search

Search all research by subject and author

Podcasts

Researchers discuss their findings and what they mean for society

Projects

Background and context, methods and data, aims and outputs

Events

Conferences, seminars and workshops

Survey methodology

Specialist research, practice and study

Taking the long view

ISER's annual report

Themes

Key research themes and areas of interest