Optimal redistribution when different workers are indistinguishable
Date
2003
Authors
Marchand, Maurice
Pestieau, Pierre
Racionero, Maria
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Publisher
University of Toronto Press
Abstract
Using the standard non linear income and commodity taxation framework, we examine the optimal policy to be adopted when the same labour disutility can receive two opposite interpretations: taste for leisure and activity limitation. In the absence of complete information about individual characteristics, an income tax does not allow distinguishing lazy from handicapped individuals. One may rely, however, on a combination of commodity and income taxes to redistribute from the former to the latter when they differ in their preferences for commodities.
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Keywords
Keywords: fiscal policy; income distribution; policy strategy; tax system
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Source
Canadian Journal of Economics
Type
Journal article
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Restricted until
2037-12-31
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