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Income taxation of couples and the tax unit choice

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  • CREMER, Helmuth
  • LOZACHMEUR, Jean-Marie
  • PESTIEAU, Pierre

Abstract

This paper studies the optimal non linear income tax of couples. We build a general unitary model of labor supply and allow multidimensional heterogeneity in a discrete type framework. We concentrate our analysis on the resulting intra-family labor allocation of labor supplies and show that this analysis is strongly related to the choice of the tax unit (individual versus joint taxation). We give a necessary condition to have fully joint taxation in this framework and discuss some examples.
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Suggested Citation

  • CREMER, Helmuth & LOZACHMEUR, Jean-Marie & PESTIEAU, Pierre, 2012. "Income taxation of couples and the tax unit choice," LIDAM Reprints CORE 2372, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2372
    DOI: 10.1007/s00148-011-0376-6
    Note: In : Journal of Population Economics, 25(2), 763-778 2012
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    5. Cigno, Alessandro & Pettini, Anna, 2002. "Taxing family size and subsidizing child-specific commodities?," Journal of Public Economics, Elsevier, vol. 84(1), pages 75-90, April.
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    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • D10 - Microeconomics - - Household Behavior - - - General

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