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Viewpoint: Innovations in the theory and practice of redistribution policy

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  • Robin Boadway

Abstract

We present a survey of key results from second-best optimal redistribution theory and their implications for tax-transfer policy. The core results include the Corlett-Hague theorem, the Deaton conditions, the production-efficiency theorem, the Atkinson-Stiglitz theorem, and the Mirrlees-Saez characterization of the optimal non-linear income tax system. These have been augmented in recent years by optimal participation tax rates, the implications of involuntary unemployment, the use of unconventional instruments, such as minimum wages, in-kind transfer, and workfare, and the optimal taxation of capital income and bequests.

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  • Robin Boadway, 2011. "Viewpoint: Innovations in the theory and practice of redistribution policy," Canadian Journal of Economics, Canadian Economics Association, vol. 44(4), pages 1138-1183, November.
  • Handle: RePEc:cje:issued:v:44:y:2011:i:4:p:1138-1183
    DOI: 10.1111/j.1540-5982.2011.01670.x
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    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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