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Fair optimal tax with endogenous productivities

Author

Listed:
  • Fleurbaey M.
  • Valletta G.

    (GSBE)

Abstract

What is a good incentive-compatible policy when one wants to respect individual choices of labor and human capital but eliminate inequalities due to unequal access to human capital and different returns to human capital, and when earnings and human capital expenditures are the only verifiable variables We propose a social ordering that incorporates this goal and we analyze the evaluation of tax reforms and the properties of optimal linear and non-linear taxes. For reform evaluation and for optimal non-linear taxation, the focus is on the situation of individuals with the most disadvantaged characteristics who work full time and spend a certain high amount in human capital.

Suggested Citation

  • Fleurbaey M. & Valletta G., 2013. "Fair optimal tax with endogenous productivities," Research Memorandum 024, Maastricht University, Graduate School of Business and Economics (GSBE).
  • Handle: RePEc:unm:umagsb:2013024
    as

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    File URL: https://cris.maastrichtuniversity.nl/portal/files/1422509/content
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    References listed on IDEAS

    as
    1. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521715348, April.
    2. VALLETTA, Giacomo, 2012. "Health, fairness and taxation," CORE Discussion Papers 2012016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Emmanuel Saez & Stefanie Stantcheva, 2016. "Generalized Social Marginal Welfare Weights for Optimal Tax Theory," American Economic Review, American Economic Association, vol. 106(1), pages 24-45, January.
    4. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591.
    5. 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.
    6. Darío Maldonado, 2008. "Education policies and optimal taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 131-143, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Equity; Justice; Inequality; and Other Normative Criteria and Measurement; Social Choice; Clubs; Committees; Associations;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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