Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282097 
Year of Publication: 
2023
Series/Report no.: 
Discussion Paper No. 405
Publisher: 
Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition, München und Berlin
Abstract: 
Are reforms towards individual taxation politically feasible? Are they desirable from a welfare perspective? We develop a method to answer such questions and apply it to the US federal income tax since the 1960s. Main findings are: As of today, Pareto-improvements require a move away from joint taxation. Revenue-neutral reforms towards individual taxation are not Pareto-improving, but attract majoritysupport. Such reforms are rejected by Rawlsian welfare measures and supported by ones with weights that are increasing in the secondary earner's income share. Thus, there is a tension between the welfare of "the poor" and the welfare of "working women."
Subjects: 
taxation of couples
tax reforms
optimal taxation
political economy
non-linear income taxation
JEL: 
C72
D72
D82
H21
Document Type: 
Working Paper

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