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Politiques fiscales optimales pour les bas revenus et principe de compensation

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  • Laurence Jacquet
  • Dirk Van de gaer

    ()
    (THEMA, Universite de Cergy-Pontoise and THEMA
    Universiteit Gent et CORE)

Abstract

We consider an economy in which agents di¤er in terms of productivity (that may be either high or low) as well as in their preferences for labour. Individuals decide whether or not they enter the labour force. In this context and under asymmetric information, the optimal tax schedules derived under the Egalitarian Equivalence criterion (Fleurbaey et Maniquet [2005, 2006]) always satisfy the compensation principle (for distinct productivity levels). Under the criterion of Roemer [1993, 1998] and the weighted maximin à la Boadway et al. [2002], the optimal tax schedules may satisfy the compensation principle while the standard criteria in the optimal taxation literature fail to do so. Numerical simulations illustrate our analytical results and highlight how the parameters in the model affect the participation tax.

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Bibliographic Info

Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2013-04.

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Date of creation: 2013
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Handle: RePEc:ema:worpap:2013-04

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Keywords: optimal taxation; compensation principle; heterogeneous preferences for labour;

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References

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  1. Chone, Philippe & Laroque, Guy, 2005. "Optimal incentives for labor force participation," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 395-425, February.
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  8. Boadway, Robin & Cuff, Katherine & Marchand, Maurice, 2000. " Optimal Income Taxation with Quasi-linear Preferences Revisited," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(4), pages 435-60.
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  16. Schokkaert, Erik & Van de gaer, Dirk & Vandenbroucke, Frank & Luttens, Roland Iwan, 2004. "Responsibility sensitive egalitarianism and optimal linear income taxation," Mathematical Social Sciences, Elsevier, vol. 48(2), pages 151-182, September.
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