Optimal Tax-Transfer Systems and Redistributive Policy
AbstractIn this paper, the authors develop 'optimal yardsticks' to gauge the effectiveness of given tax and benefit policies in reducing inequality. They show that the conjunction of the optimal tax and optimal benefits policies constitutes the optimal tax-and-benefit policy, given the tax and benefit budget sizes. A decomposition formula enables trends in the inequality impact of taxes and benefits to be explained in terms of changing policy effectiveness (targeting) and budget size effects. The analysis incorporates a distributional judgement parameter, for sensitivity analysis, and concludes with an examination of the Finnish case for the period 1971-90. Copyright 1999 by The editors of the Scandinavian Journal of Economics.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 101 (1999)
Issue (Month): 1 (March)
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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
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- Fellman, Johan, 2001. "Mathematical properties of classes of income redistributive policies," European Journal of Political Economy, Elsevier, vol. 17(1), pages 179-192, March.
- Johan Fellman, 2009. "Discontinuous transformations, Lorenz curves and transfer policies," Social Choice and Welfare, Springer, vol. 33(2), pages 335-342, August.
- Ivica Urban, 2009. "Kakwani decomposition of redistributive effect: Origins, critics and upgrades," Working Papers 148, ECINEQ, Society for the Study of Economic Inequality.
- Thor O. Thoresen & Zhiyang Jia & Peter J. Lambert, 2013. "Distributional benchmarking in tax policy evaluations," Discussion Papers 765, Research Department of Statistics Norway.
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