Some Results on the Comparative Statics of Optimal Categorical Transfer Payments
To alleviate equity-efficiency trade-offs, tax transfer systems pay categorical transfers to groups defined by characteristics correlated with earnings ability. The author examines the comparative statics of categorical transfer payments in a linear income tax model through analysis of first-order conditions and numerical calculations. The analysis sharpens previous results on the size of categorical transfers, the resulting reduction in the income tax rate, and the associated welfare gain. Notably, the author finds that categorical transfers should vary more across groups when earnings ability is more equal within each group, when labor supply is more elastic, and when less revenue is required for public goods.
When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:29:y:2001:i:2:p:148-180. 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: (SAGE Publishing)
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.