This book reflects the reality of most taxpayers. It provides a comprehensive and up-to-date treatment of optimal tax issues from a household economics perspective. A unified and integrated approach is employed to analyze optimal taxation in a homogeneous way.
The author adopts a household production approach to allow a critical understanding of the way tax policy impacts economic agents. This way home activities can be studied with the same toolbox normally employed for the market activities. This is motivated by the fact that in reality most agents act from within a family, and their interaction with the economy at large and tax policy in particular is mediated by the interdependence of the family members‘ choices, although taxation is typically studied in a framework in which the economic agents are isolated individuals. The aim of the book is to provide, a comprehensive treatment of family taxation whithin this approach, focusing on the normative side – social welfare maximising taxation.
As a consequence of the book's analysis, many important and established results in public economics may have to be revised. The book will be useful to both graduate students and researchers alike in that it adopts a rigorous analytical language but also includes ample intuitive explanations.
Author(s): Alessandro Balestrino
Series: Population Economics
Publisher: Springer
Year: 2023
Language: English
Pages: 109
City: Cham
Preface
Contents
1 Standard Optimal Taxation with Single Agents: What It Is and What to Use in Its Place
1.1 A Brief Synthesis of Standard Optimal Tax Theory
1.1.1 The Model
1.1.2 The Tax Rules
1.1.3 A Simpler Setting: Linear Income Taxation
1.2 What to Use in Place of the Standard Framework
1.2.1 Intragenerational Issues
1.2.2 Intergenerational Issues
2 Optimal Taxation in the Presence of Household Production
2.1 Indirect Taxation in the Presence of Home-Production
2.1.1 The consumer’s and the Government’s Problems
2.2 The Tax Rules
2.2.1 Taxing Input Goods
2.2.2 Taxing Market Substitutes
2.2.3 Taxing Input Goods and Market Substitutes
2.2.4 User Charges
2.2.5 Summary So Far
2.3 Redistributive Taxation in the Presence of Bi-dimensional Differences Among Households
2.3.1 Home-Production of Non-tradeable Goods
2.3.2 The Direction of Re-distribution
2.3.3 Optimal Second-Best Taxation
3 Income Taxation with Two-Person Households
3.1 Introduction
3.2 A Model of Household Choice
3.3 Income Taxation
3.3.1 Comparative Advantages and Tax Policy
3.3.2 Optimal Direct Taxation
3.4 Tax Reform
3.4.1 Alternative Income Tax Structures
3.4.2 Non Cooperative Time Allocation with Differentiated Tax Rates
3.4.3 A Move Towards a Flat Rate System
3.5 Concluding Remarks
4 Income Taxation and Public Spending with Two-Person Households
4.1 Introduction
4.2 Household Choice
4.3 Optimal Policy I: Efficiency
4.4 Optimal Policy II: Equity
5 The Fiscal Treatment of Family Size: An Overview
5.1 Introduction
5.2 A Model of Family Choice
5.3 Establishing Benchmark Results
5.3.1 First-Best Policy
5.3.2 Second-Best Taxes When Only Efficiency Matters
5.4 Second-Best Taxes with a Redistributive Objective
5.4.1 Linear Tax System
5.4.2 Mixed Tax System
5.5 Concluding Remarks
6 The Fiscal Treatment of Family Size: A Further Look
6.1 Introduction
6.2 The Setup
6.2.1 Households
6.2.2 Mimickers
6.3 Optimal Taxation
6.3.1 The Direction of Re-distribution
6.3.2 Taxes on Income
6.3.3 Taxes on Commodities, and Taxes on Number of Children
6.4 Redistributive Policy with Four Household Types
6.4.1 Optimal Income Tax
6.4.2 Optimal Indirect Taxes and Taxes on Children
6.4.3 The Tax Treatment of Children and Child-Specific Goods
6.5 Conclusions
7 The Tax Treatment of Children When Parents Act Non-cooperatively: A Preliminary Account
7.1 Introduction
7.2 A Model with Exogenous Fertility
7.2.1 Revenue-Neutral Fiscal Reforms
7.3 Concluding Remarks: Moving Towards Endogenous Fertility
Appendix Bibliography
