On the optimality of joint taxation for noncooperative couples
We present a noncooperative model of a family's time allocation between work and a home-produced public good, and examine whether the income tax should apply to couples or individuals. While tax-induced labor supply distortions lead to overprovision of the public good, spouses' failure to internalize the collective effect of their choices points towards underprovision. A large parameter range exists for which a move from individual to joint taxation improves the welfare of both spouses. The source of Pareto-improvement consists in moving the level of the public good closer to its first-best, while an adjustment of intra-family transfers compensates the secondary earner for the increased tax load.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Volker Meier & Matthias Wrede, 2013.
"Reducing the excess burden of subsidizing the stork: joint taxation, individual taxation, and family tax splitting,"
Journal of Population Economics,
Springer;European Society for Population Economics, vol. 26(3), pages 1195-1207, July.
- Meier, Volker & Wrede, Matthias, 2013. "Reducing the excess burden of subsidizing the stork: Joint taxation, individual taxation, and family tax splitting," Munich Reprints in Economics 19213, University of Munich, Department of Economics.
- Volker Meier & Matthias Wrede, 2008. "Reducing the Excess Burden of Subsidizing the Stork: Joint Taxation, Individual Taxation, and Family Tax Splitting," CESifo Working Paper Series 2470, CESifo Group Munich.
- Apps, Patricia & Rees, Ray, 2007.
"The Taxation of Couples,"
IZA Discussion Papers
2910, Institute for the Study of Labor (IZA).
- Patricia Apps & Ray Rees, 2007. "The Taxation of Couples," Discussion Papers 07/21, Department of Economics, University of York.
- Patricia Apps & Ray Rees, 2007. "The Taxation of Couples," CEPR Discussion Papers 559, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Barham, Vicky & Devlin, Rose Anne & Yang, Jie, 2009.
"A theory of rational marriage and divorce,"
European Economic Review,
Elsevier, vol. 53(1), pages 93-106, January.
- Peter Gottfried & Wolfram Richter, 1999. "The Tax Unit and Household Production: Comment," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 404-409, April.
- Apps,Patricia & Rees,Ray, 2009.
"Public Economics and the Household,"
Cambridge University Press, number 9780521716284, December.
- Kleven, Henrik & Kreiner, Claus Thustrup & Saez, Emmanuel, 2006.
"The Optimal Income Taxation of Couples,"
CEPR Discussion Papers
5978, C.E.P.R. Discussion Papers.
- Alesina, Alberto F & Ichino, Andrea & Karabarbounis, Loukas, 2007.
"Gender Based Taxation and the Division of Family Chores,"
CEPR Discussion Papers
6591, C.E.P.R. Discussion Papers.
- Alberto Alesina & Andrea Ichino & Loukas Karabarbounis, 2011. "Gender-Based Taxation and the Division of Family Chores," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 1-40, May.
- Alberto Alesina & Andrea Ichino & Loukas Karabarbounis, 2007. "Gender Based Taxation and the Division of Family Chores," NBER Working Papers 13638, National Bureau of Economic Research, Inc.
- Alesina, Alberto & Ichino, Andrea & Karabarbounis, Loukas, 2007. "Gender Based Taxation and the Division of Family Chores," IZA Discussion Papers 3233, Institute for the Study of Labor (IZA).
- Chen, Zhiqi & Woolley, Frances, 2001.
"A Cournot-Nash Model of Family Decision Making,"
Royal Economic Society, vol. 111(474), pages 722-48, October.
- Pollak, Robert A, 1985. "A Transaction Cost Approach to Families and Households," Journal of Economic Literature, American Economic Association, vol. 23(2), pages 581-608, June.
- Piggott, John & Whalley, John, 1996.
"The Tax Unit and Household Production,"
Journal of Political Economy,
University of Chicago Press, vol. 104(2), pages 398-418, April.
- Helmut Rainer, 2005.
"Should We Write Prenuptial Contracts?,"
Discussion Paper Series, Department of Economics
200514, Department of Economics, University of St. Andrews.
- Apps, P.F. & Rees, R., 1998.
"On the Taxation of Trade Within and Between Households,"
337, Australian National University - Department of Economics.
- Apps, Patricia & Rees, Ray, 1999. "On the taxation of trade within and between households," Journal of Public Economics, Elsevier, vol. 73(2), pages 241-263, August.
- Boskin, Michael J. & Sheshinski, Eytan, 1983.
"Optimal tax treatment of the family: Married couples,"
Journal of Public Economics,
Elsevier, vol. 20(3), pages 281-297, April.
- Michael J. Boskin & Eytan Sheshinski, 1979. "Optimal Tax Treatment of the Family: Married Couples," NBER Working Papers 0368, National Bureau of Economic Research, Inc.
- Lundberg, Shelly & Pollak, Robert A, 1993.
"Separate Spheres Bargaining and the Marriage Market,"
Journal of Political Economy,
University of Chicago Press, vol. 101(6), pages 988-1010, December.
- Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Working Papers 91-08, University of Washington, Department of Economics.
- Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Discussion Papers in Economics at the University of Washington 91-08, Department of Economics at the University of Washington.
- Patricia Apps & Ray Rees, 2011.
"Relational Contracts, Taxation and the Household,"
CESifo Economic Studies,
CESifo, vol. 57(2), pages 245-258, June.
- Patricia F. Apps & Ray Rees, 1999. "Individual versus Joint Taxation in Models with Household Production," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 393-403, April.
- Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 581-601, December.
- Dan Anderberg, 2007. "Inefficient households and the mix of government spending," Public Choice, Springer, vol. 131(1), pages 127-140, April.
- Jonathan P Thomas & Tim Worrall, 2010. "Dynamic Relational Contracts with Credit Constraints," The School of Economics Discussion Paper Series 1009, Economics, The University of Manchester.
- Imran Rasul, 2006. "The Economics of Child Custody," Economica, London School of Economics and Political Science, vol. 73(289), pages 1-25, 02.
When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:19:y:2012:i:4:p:633-641. 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: (Shamier, Wendy)
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.