This paper examines the properties of the optimal nonlinear income tax when preferences are quasi-linear in leisure and individuals differ in their ability and their preferences for leisure. The government seeks to redistribute income. It can perfectly observe the level of endogenous income but cannot observe either ability or preferences. The heterogeneity of preferences leads to problems of comparability between individual utilities which challenge the design of redistributive schemes. We analyze the consequences of adopting a utilitarian social welfare function where the government is allowed to give different weights to individuals with different preferences. Under this particular social objective and given the quasi-linearity of preferences, we are able to obtain closed-form solutions for the marginal tax rates and to examine the progressivity of the tax system according to the weights used. Copyright Blackwell Publishing, Inc. 2002.

Existing political economy models of pensions focus on age and productivity. In this paper we incorporate two additional individual characteristics: sex and marital status. We ignore the role of age, by assuming that people vote at the start of their life, and characterize the preferred rate of taxation that finances a Beveridgean pension scheme when individuals differ in wage, sex and marital status. We allow for two types of couples: one-breadwinner and two-breadwinner couples. Marriage pools both wage and longevity differences between men and women. Hence singles tend to have more extreme preferred tax rates than couples. We show that the majority voting outcome depends on the relative number of one-breadwinner couples and on the size of derived pension rights.

Education policy, Optimal income taxation, Equal opportunity, H20, I20, D63,

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. JEL Classification: H21, H41Redistribution optimale quand les divers travailleurs sont indistincts. A l'aide du cadre d'analyse conventionnel de fiscalite´non line´aire sur les revenus et les biens, ce me´moire examine la politique optimale a`adopter quand le meˆme niveau de de´sutilite´du travail peut eˆtre interpre´te´de deux manie`res oppose´es : gouˆt pour le loisir et souffrance attribuable a`une infirmite´. En l'absence de renseignements complets a`propos des caracte´ristiques des individus, un impoˆt sur le revenu ne permet pas de distinguer les individus paresseux de ceux qui sont handicape´s. On peut cependant compter sur une combinaison de taxes sur les revenus et les biens pour redistribuer du premier groupe vers le second quand leurs pre´fe´rences pour les biens diffe`rent.

Should pension provisions di¤er by occupation? We study the optimality of allowing the pension policies to di¤er by occupation when individuals di¤er in longevity and occupation, longevity is private information but occupation is observable. There is a case for di¤erentiating the pension policy by occupation when longevity is (imperfectly) correlated with occupation. The short-lived workers in the safe occupation are however made worse-o¤, more so when the social objective includes a higher social weight on short-lived individuals to redress the implicit bias towards long-lived that the unweighted utilitarian objective entails. The maximin criterion ensures equal utility for short-lived workers regardless of occupation but those in the safe occupation consume the most when young, the least when old and retire the earliest. This is achieved by taxing-often quite heavily-their savings and their earnings from prolonged activity.