Tax-benefit revealed social preferences
This paper inverts the usual logic of applied optimal income taxation. It starts from the observed distribution of income before and after redistribution and corresponding marginal tax rates. Under a set of simplifying assumptions, it is then possible to recover the social welfare function that would make the observed marginal tax rate schedule optimal. In this framework, the issue of the optimality of an existing tax-benefit system is transformed into the issue of the shape of the social welfare function associated with that system and whether it satisfies elementary properties. This method is applied to the French redistribution system with the interesting implication that the French redistribution authority may appear, under some plausible scenario concerning the size of the labor supply behavioral reactions, non Paretian (e.g. giving negative marginal social weights to the richest class of tax payers).
|Date of creation:||01 Oct 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0)1206 872957
Fax: +44 (0)1206 873151
Web page: https://www.iser.essex.ac.uk/euromod/
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.:
- Saez, Emmanuel, 2001.
"Using Elasticities to Derive Optimal Income Tax Rates,"
Review of Economic Studies,
Wiley Blackwell, vol. 68(1), pages 205-29, January.
- Emmanuel Saez, 2000. "Using Elasticities to Derive Optimal Income Tax Rates," NBER Working Papers 7628, National Bureau of Economic Research, Inc.
- Emmanuel Saez, 2002.
"Optimal Income Transfer Programs: Intensive Versus Extensive Labor Supply Responses,"
The Quarterly Journal of Economics,
MIT Press, vol. 117(3), pages 1039-1073, August.
- Emmanuel Saez, 2000. "Optimal Income Transfer Programs: Intensive Versus Extensive Labor Supply Responses," NBER Working Papers 7708, National Bureau of Economic Research, Inc.
- François Bourguignon & Thierry Magnac, 1990. "Labor Supply and Taxation in France," Journal of Human Resources, University of Wisconsin Press, vol. 25(3), pages 358-389.
- Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, vol. 38(114), pages 175-208, April.
- Kleven, Henrik & Kreiner, Claus Thustrup & Saez, Emmanuel, 2006.
"The Optimal Income Taxation of Couples,"
CEPR Discussion Papers
5978, C.E.P.R. Discussion Papers.
- Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, vol. 53(6), pages 1255-82, November.
- Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, vol. 25(3), pages 259-298, December.
- repec:cai:recosp:reco_p2000_51n3_0473 is not listed on IDEAS
- Richard Blundell & Alan Duncan & Costas Meghir, 1998.
"Estimating Labor Supply Responses Using Tax Reforms,"
Econometric Society, vol. 66(4), pages 827-862, July.
- Richard Blundell & Alan Duncan & Costas Meghir, 1995. "Estimating labour supply responses using tax reforms," IFS Working Papers W95/07, Institute for Fiscal Studies.
- Seade, J. K., 1977. "On the shape of optimal tax schedules," Journal of Public Economics, Elsevier, vol. 7(2), pages 203-235, April.
- Olivier Bargain, 2007.
"On Modeling Household Labor Supply With Taxation,"
200711, School of Economics, University College Dublin.
- repec:cup:cbooks:9780521355643 is not listed on IDEAS
- Sutherland, Holly, 2001. "EUROMOD: an integrated European benefit-tax model: final report," EUROMOD Working Papers EM9/01, EUROMOD at the Institute for Social and Economic Research.
- Richard Blundell & Thomas MaCurdy, 1998.
"Labour supply: a review of alternative approaches,"
IFS Working Papers
W98/18, Institute for Fiscal Studies.
- Philippe Chone & Guy Laroque, 2001.
"Optimal Incentives for Labor Force Participation,"
2001-26, Centre de Recherche en Economie et Statistique.
- Ebert, Udo, 1992. "A reexamination of the optimal nonlinear income tax," Journal of Public Economics, Elsevier, vol. 49(1), pages 47-73, October.
- Tuomala, Matti, 1990. "Optimal Income Tax and Redistribution," OUP Catalogue, Oxford University Press, number 9780198286059, March.
- Richard Blundell & Mike Brewer & Peter Haan & Andrew Shephard, 2009. "Optimal Income Taxation of Lone Mothers: An Empirical Comparison of the UK and Germany," Economic Journal, Royal Economic Society, vol. 119(535), pages F101-F121, 02.
- François Bourguignon & Amedeo Spadaro, 2000. "Redistribution et incitations au travail. Une application empirique simple de la fiscalité optimale," Revue Économique, Programme National Persée, vol. 51(3), pages 473-487.
- repec:cup:cbooks:9780521586115 is not listed on IDEAS
- Feldstein, Martin, 1995. "Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Scholarly Articles 2766676, Harvard University Department of Economics.
- Guy Laroque, 2005. "Income Maintenance and Labor Force Participation," Econometrica, Econometric Society, vol. 73(2), pages 341-376, 03.
When requesting a correction, please mention this item's handle: RePEc:ese:emodwp:em9-08. 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: (Paul Groves)
If references are entirely missing, you can add them using this form.