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Optimal income taxation with single and couple households

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  • Juan Miguel Gallego

Abstract

This paper reviews the literature on optimal income taxation with single and couple households. In the seminal works of Mirrlees and Atkinson and Stiglitz the household is composed by one member. However, I described a model where households can have more than one member. There is an economy which is composed by both one-memberand two member families. This structure introduces vertical and horizontal equity considerations. For linear taxation the results of Sheshinski hold, however in optimal income taxation additional results to those of Mirrlees should be considered.

Suggested Citation

  • Juan Miguel Gallego, 2004. "Optimal income taxation with single and couple households," Revista de Economía del Rosario, Universidad del Rosario, December.
    • Handle: RePEc:col:000151:003303
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    File URL: http://revistas.urosario.edu.co/index.php/economia/article/view/1025/924
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    References listed on IDEAS

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    1. Balcer, Yves & Sadka, Efraim, 1986. "Equivalence scales, horizontal equity and optimal taxation under utilitarianism," Journal of Public Economics, Elsevier, vol. 29(1), pages 79-97, February.
    2. Alan J. Auerbach & Kevin A. Hassett, 2002. "A New Measure of Horizontal Equity," American Economic Review, American Economic Association, vol. 92(4), pages 1116-1125, September.
    3. Apps, Patricia & Rees, Ray, 1999. "On the taxation of trade within and between households," Journal of Public Economics, Elsevier, vol. 73(2), pages 241-263, August.
    4. Atkinson, A. B. & Stiglitz, J. E., 1972. "The structure of indirect taxation and economic efficiency," Journal of Public Economics, Elsevier, vol. 1(1), pages 97-119, April.
    5. Eytan Sheshinski, 1972. "The Optimal Linear Income-tax," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 39(3), pages 297-302.
    6. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    7. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    8. Shelly Lundberg & Robert A. Pollak, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-158, Fall.
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    More about this item

    Keywords

    Optimal income taxation; linear taxation; vertical equity; horizontal equity;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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