IDEAS home Printed from
   My bibliography  Save this article

Multi-dimensional Heterogeneity and the Design of Tax Policies


  • Helmuth Cremer

    (University of Toulouse)


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.

Suggested Citation

  • Helmuth Cremer, 2003. "Multi-dimensional Heterogeneity and the Design of Tax Policies," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 4(1), pages 35-45, December.
  • Handle: RePEc:bic:journl:v:4:y:2003:i:1:p:35-45

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. CREMER, Helmuth & PESTIEAU, Pierre, 2016. "Taxing Pensions," CORE Discussion Papers 2016006, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. 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 Jakobsone). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.