Health, Fairness and Taxation
AbstractWe consider a model where agents differ in their preferences about consumption labor and health,in their (health-dependent) earning ability, and in their health disposition. We study the jointtaxation of income and health expenditure, under incentive-compatibility constraints, on the basisof efficiency and fairness principles. The fairness principles we consider propose, on one side,to reduce inequalities deriving from factors that do not depend on individuals'' responsibility. Onthe other side, redistribution should be precluded at least when all agents in the economy haveequal physical characteristics. We construct, on the basis of such principles, a particular socialwelfare function. Then we give the explicit formula for the comparison of tax policies: we provethat a tax reform should always benefit agents with the worst earning ability and the worst healthdisposition first. Finally, at the bottom of the income distribution the optimal tax scheme shouldexhibit non-uniform tax rates over health expenditure and non-positive average marginal tax ratesover income.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 017.
Date of creation: 2012
Date of revision:
Contact details of provider:
Web page: http://www.maastrichtuniversity.nl/web/UMPublications.htm
public economics ;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-16 (All new papers)
- NEP-HEA-2012-09-16 (Health Economics)
- NEP-PBE-2012-09-16 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robin Boadway & Maurice Marchand & Pierre Pestieau & María del Mar Racionero, 2002.
"Optimal Redistribution with Heterogeneous Preferences for Leisure,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 4(4), pages 475-498, October.
- BOADWAY, R. & MARCHAND, M. & PESTIEAU, P. & del MAR RACIONERO, M., 2001. "Optimal redistribution with heterogeneous preferences for leisure," CORE Discussion Papers 2001025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2002.
"Arrovian Aggregation in Economic Environments: How Much Should We Know About Indifference Surfaces?,"
2002-10, Graduate School of Economics, Hitotsubashi University.
- Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2005. "Arrovian aggregation in economic environments: how much should we know about indifference surfaces?," Journal of Economic Theory, Elsevier, vol. 124(1), pages 22-44, September.
- Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2002. "Arrovian Aggregation in Economic Environments: How Much Should We Know About Indifference Surfaces?," Discussion Paper 121, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
- Philippe Choné & Guy Laroque, 2009.
"Negative marginal tax rates and heterogeneity,"
IFS Working Papers
W09/12, Institute for Fiscal Studies.
- Fleurbaey, Marc, 2012.
"Fairness, Responsibility, and Welfare,"
Oxford University Press, number 9780199653591.
- Marc Fleurbaey, 2005. "Health, Wealth, and Fairness," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(2), pages 253-284, 05.
- Boadway, Robin & Jacquet, Laurence, 2008.
"Optimal marginal and average income taxation under maximin,"
Journal of Economic Theory,
Elsevier, vol. 143(1), pages 425-441, November.
- Robin Boadway & Laurence Jacquet, 2006. "Optimal Marginal and Average Income Taxation under Maxi-min," Working Papers 1073, Queen's University, Department of Economics.
- Robin, BOADWAY & Laurence, JACQUET, 2006. "Optimal Marginal and Average Income Taxation under Maxi-min," Discussion Papers (ECON - DÃ©partement des Sciences Economiques) 2006020, Université catholique de Louvain, Département des Sciences Economiques.
- Chone, Philippe & Laroque, Guy, 2005.
"Optimal incentives for labor force participation,"
Journal of Public Economics,
Elsevier, vol. 89(2-3), pages 395-425, February.
- Fleurbaey,Marc & Maniquet,François, 2011.
"A Theory of Fairness and Social Welfare,"
Cambridge University Press, number 9780521887427, November.
- d'Aspremont, Claude & Gevers, Louis, 1977. "Equity and the Informational Basis of Collective Choice," Review of Economic Studies, Wiley Blackwell, vol. 44(2), pages 199-209, June.
- Hammond, Peter J, 1976. "Equity, Arrow's Conditions, and Rawls' Difference Principle," Econometrica, Econometric Society, vol. 44(4), pages 793-804, July.
- Fleurbaey, Marc, 2006.
"Is commodity taxation unfair?,"
Journal of Public Economics,
Elsevier, vol. 90(10-11), pages 1765-1787, November.
- Emmanuel Saez, 2002.
"Optimal Income Transfer Programs: Intensive Versus Extensive Labor Supply Responses,"
The Quarterly Journal of Economics,
MIT Press, vol. 117(3), pages 1039-1073, August.
- Emmanuel Saez, 2000. "Optimal Income Transfer Programs: Intensive Versus Extensive Labor Supply Responses," NBER Working Papers 7708, National Bureau of Economic Research, Inc.
- Blomqvist, Ake & Horn, Henrik, 1984. "Public health insurance and optimal income taxation," Journal of Public Economics, Elsevier, vol. 24(3), pages 353-371, August.
- VALLETTA, Giacomo, 2007.
"A fair solution to the compensation problem,"
CORE Discussion Papers
2007077, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- FLEURBAEY, Marc & SCHOKKAERT, Erik, 2007.
"Unfair inequalities in health and health care,"
CORE Discussion Papers
2007090, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Marc Fleurbaey & François Maniquet, 2005. "Fair social orderings when agents have unequal production skills," Social Choice and Welfare, Springer, vol. 24(1), pages 93-127, 09.
- Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
- Selma J. Mushkin, 1962. "Health as an Investment," Journal of Political Economy, University of Chicago Press, vol. 70, pages 129.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charles Bollen).
If references are entirely missing, you can add them using this form.