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Jahrestagung des Vereins für Socialpolitik 2011 (Frankfurt a. M.): Die Ordnung der Weltwirtschaft - Lektionen aus der Krise >
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http://hdl.handle.net/10419/48696
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| Title: | | On the Optimality of Joint Taxation for Non-Cooperative Couples  |
| Authors: | | Meier, Volker Rainer, Helmut |
| Issue Date: | | 2011 |
| Series/Report no.: | | Beiträge zur Jahrestagung des Vereins für Socialpolitik 2011: Die Ordnung der Weltwirtschaft: Lektionen aus der Krise - Session: Tax Policy D16-V2 |
| Abstract: | | We present a non-cooperative model of a family's time allocation between work and a home-produced public good, and examine whether the income tax should apply to couples or individuals. While tax-induced labor supply distortions lead to overprovision of the public good, spouses' failure to internalize the collective effect of their choices points towards underprovision. A large parameter range exists for which a move from individual to joint taxation improves the welfare of both spouses. The source of Pareto-improvement consists in moving the level of the public good closer to its first-best, while an adjustment of intra-family transfers compensates the secondary earner for the increased tax load. |
| Subjects: | | Individual taxation joint taxation household production public goods |
| JEL: | | H24 H23 J22 D13 D62 |
| Document Type: | | Conference Paper |
| Appears in Collections: | | Jahrestagung des Vereins für Socialpolitik 2011 (Frankfurt a. M.): Die Ordnung der Weltwirtschaft - Lektionen aus der Krise
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