Multi-dimensional Heterogeneity and the Design of Tax Policies
This paper surveys some recent contributions which have revisited the design of optimal policy mix when individuals differ in several characteristics. Because of the technical difficulties raised by multidimensional screening models the specification of tractable taxation models has long been neglected. This is certainly a serious omission because the underlying policy issues are of considerable importance for the policy design in today’s welfare states. The main lesson that emerges is that the design of redistributive policy is not as “simple” as the Atkinson and Stiglitz theorem suggests. Policy makers should not concentrate on a single instrument (labor income taxation). While the optimal design of the income tax is certainly a significant ingredient of the overall policy mix, it is not the only relevant instrument. The optimal policy mix may very well rely on a large number of instruments including capital income tax, social insurance and housing policies.
Volume (Year): 4 (2003)
Issue (Month): 1 (December)
|Contact details of provider:|| Postal: |
Phone: +371 67039320
Fax: +371 67039318
Web page: http://www.biceps.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:bic:journl:v:4:y:2003:i:1:p:35-45. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lelde Ivankova)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.