Health, fairness and taxation
We consider a model where agents differ in their preferences about consumption labor and health, in their (health-dependent) earning ability, and in their health disposition. We study the joint taxation of income and health expenditure, under incentive-compatibility constraints, on the basis of efficiency and fairness principles. The fairness principles we consider propose, on one side, to reduce inequalities deriving from factors that do not depend on individuals' responsibility. On the other side, redistribution should be precluded at least when all agents in the economy have equal physical characteristics. We construct, on the basis of such principles, a particular social welfare function. Then we give the explicit formula for the comparison of tax policies: we prove that a tax reform should always benefit agents with the worst earning ability and the worst health disposition first. Finally, at the bottom of the income distribution the optimal tax scheme should exhibit non-uniform tax rates over health expenditure and non-positive average marginal tax rates over income.
|Date of creation:||09 May 2012|
|Contact details of provider:|| Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
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.:
- Fleurbaey,Marc & Maniquet,FranÃ§ois, 2011.
"A Theory of Fairness and Social Welfare,"
Cambridge University Press, number 9780521887427, December.
- Boadway, Robin & Jacquet, Laurence, 2008.
"Optimal marginal and average income taxation under maximin,"
Journal of Economic Theory,
Elsevier, vol. 143(1), pages 425-441, November.
- Robin, BOADWAY & Laurence, JACQUET, 2006. "Optimal Marginal and Average Income Taxation under Maxi-min," Discussion Papers (ECON - Département des Sciences Economiques) 2006020, Université catholique de Louvain, Département des Sciences Economiques.
- Robin Boadway & Laurence Jacquet, 2006. "Optimal Marginal and Average Income Taxation under Maxi-min," Working Papers 1073, Queen's University, Department of Economics.
- Philippe Chone & Guy Laroque, 2001.
"Optimal Incentives for Labor Force Participation,"
2001-26, Centre de Recherche en Economie et Statistique.
- Marc Fleurbaey & Kotaro Suzumura & Koichi Tadenuma, 2005.
"Arrovian aggregation in economic environments: How much should we know about indifference surfaces?,"
- Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2005. "Arrovian aggregation in economic environments: how much should we know about indifference surfaces?," Journal of Economic Theory, Elsevier, vol. 124(1), pages 22-44, September.
- Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2002. "Arrovian Aggregation in Economic Environments: How Much Should We Know About Indifference Surfaces?," Discussion Papers 2002-10, Graduate School of Economics, Hitotsubashi University.
- Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2002. "Arrovian Aggregation in Economic Environments: How Much Should We Know About Indifference Surfaces?," Discussion Paper 121, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
- James M. Poterba, 1994.
"Government Intervention in the Markets for Education and Health Care: How and Why?,"
NBER Working Papers
4916, National Bureau of Economic Research, Inc.
- James M. Poterba, 1996. "Government Intervention in the Markets for Education and Health Care: How and Why?," NBER Chapters, in: Individual and Social Responsibility: Child Care, Education, Medical Care, and Long-Term Care in America, pages 277-308 National Bureau of Economic Research, Inc.
- Robin Boadway & Maurice Marchand & Pierre Pestieau & María del Mar Racionero, 2002.
"Optimal Redistribution with Heterogeneous Preferences for Leisure,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 4(4), pages 475-498, October.
- BOADWAY, R. & MARCHAND, M. & PESTIEAU, P. & del MAR RACIONERO, M., 2001. "Optimal redistribution with heterogeneous preferences for leisure," CORE Discussion Papers 2001025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- BOADWAY, Robin & MARCHAND, Maurice & PESTIEAU , Pierre & RACIONERO, Maria del mar, "undated". "Optimal redistribution with heterogeneous preferences for leisure," CORE Discussion Papers RP 1566, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- FLEURBAEY, Marc & SCHOKKAERT, Erik, 2007.
"Unfair inequalities in health and health care,"
CORE Discussion Papers
2007090, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Philippe Choné & Guy Laroque, 2009.
"Negative marginal tax rates and heterogeneity,"
IFS Working Papers
W09/12, Institute for Fiscal Studies.
- Fleurbaey, Marc, 2008.
"Fairness, Responsibility, and Welfare,"
Oxford University Press, number 9780199215911.
- Luft, Harold S, 1975. "The Impact of Poor Health on Earnings," The Review of Economics and Statistics, MIT Press, vol. 57(1), pages 43-57, February.
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2012016. 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: (Alain GILLIS)
If references are entirely missing, you can add them using this form.