No full text
External report (Reports)
Redistributive Policies through Taxation: Theory and Evidence
GRANT, Charles; Koulovatianos, Christos; MICHAELIDES, Alexander et al.
2003
 

Files


Full Text
No document available.

Send to



Details



Keywords :
Undiversifiable earnings risk; tax distortions; equity; efficiency; transfers
Abstract :
[en] Increasing marginal tax rates and making payments to the poor reduce inequality and introduce savings dis-incentives. Using a heterogeneous agent model with incomplete markets, we show that higher taxes (and transfers) decrease consumption inequality but also mean savings and mean consumption. This demonstrates the trade-off between equity and efficiency. These theoretical predictions are tested by exploiting differences in tax rates across US states. Using two surveys, the Consumer Expenditure Survey and the Current Population Survey, we show that the empirical evidence supports the theory, and that there is a comparatively small fall in efficiency for a given gain in equity associated with higher taxation.
Disciplines :
Economic systems & public economics
Author, co-author :
GRANT, Charles
Koulovatianos, Christos  ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
MICHAELIDES, Alexander
PADULA, Mario
Language :
English
Title :
Redistributive Policies through Taxation: Theory and Evidence
Publication date :
2003
Publisher :
European University Institute
Report number :
ECO2003/13
Commentary :
Economics Working Papers
Available on ORBilu :
since 27 November 2013

Statistics


Number of views
50 (1 by Unilu)
Number of downloads
0 (0 by Unilu)

Bibliography


Similar publications



Contact ORBilu