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Redistributive Effects of the Taxation of Couples and Families: A Microsimulation Study of Income Tax

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  • Mathias André
  • Antoine Sireyjol

Abstract

[eng] This study examines the budgetary and redistributive effects of marital and family income taxation in France. On the basis of the INES microsimulation model, it proposes a complete methodology for individualising incomes and the various tax schemes targeting couples and families. By comparing income tax in 2017 with a fictitious situation in which it would have been applied on an individual basis, the effects of marital and family taxation are seen to be significant and overwhelmingly beneficial: 13 million households gain, benefiting from a total of 27.7 billion euros. 1.1 million households lose out, primarily those for which marital taxation is not offset by the gains from family taxation. 40% of the total effect is due to marital taxation and 60% is due to family taxation. The wealthiest 15% of people are those who benefit the most from marital taxation (48% of the gains, compared with less than 25% for the poorest 50%).

Suggested Citation

  • Mathias André & Antoine Sireyjol, 2021. "Redistributive Effects of the Taxation of Couples and Families: A Microsimulation Study of Income Tax," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 526-527, pages 21-39.
    • Handle: RePEc:nse:ecosta:ecostat_2021_526d_2
    DOI: https://doi.org/10.24187/ecostat.2021.526d.2049
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    File URL: https://www.insee.fr/en/statistiques/fichier/5430846/02_ES526-527_Andre-Sireyjol_EN.pdf
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    References listed on IDEAS

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    1. Guillaume Allègre & Hélène Périvier & Muriel Pucci, 2021. "Taxation of Couples and Marital Status – Simulation of Three Reforms of the Marital Quotient in France," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 526-527, pages 3-20.
    2. LaLumia, Sara, 2008. "The effects of joint taxation of married couples on labor supply and non-wage income," Journal of Public Economics, Elsevier, vol. 92(7), pages 1698-1719, July.
    3. repec:hal:spmain:info:hdl:2441/56j05jth3g9eoq20p24hjbt2um is not listed on IDEAS
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    Cited by:

    1. Clément Carbonnier, 2021. "Family-Based Tax and Transfer System – Issues for Income Tax and Other Public Policies," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 526-527, pages 41-48.

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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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