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Title:Taxing children: the re-distributive role of child benefits - revisited PDF Logo
Authors:Blumkin, Tomer
Margalioth, Yoram
Sadka, Efraim
Issue Date:2010
Series/Report no.:CESifo working paper 2970
Abstract:In this paper, we challenge the conventional wisdom that due to the negative correlation between family size and earning ability, family size can be used as a 'tagging' device, and calls for subsidizing children (via child allowances) to enhance egalitarian objectives. We show that the case for subsidizing children crucially hinges on child allowances being provided on a universal basis. Notably, when child benefits are means-tested, taxing children at the margin (namely, setting the total benefits to decline with the number of children) is socially optimal.
Subjects:child allowance
re-distribution
means-testing
universal
tagging
optimal taxation
JEL:D60
H20
H50
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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