Tax–benefit revealed social preferences

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper inverts the usual logic of applied optimal income taxation. It starts from the observed distribution of income before and after redistribution and corresponding marginal tax rates. Under a set of simplifying assumptions, it is then possible to recover the social welfare function that would make the observed marginal tax rate schedule optimal. In this framework, the issue of the optimality of an existing tax-benefit system is transformed into the issue of the shape of the social welfare function associated with that system and whether it satisfies elementary properties. This method is applied to the French redistribution system with the interesting implication that the French redistribution authority may appear, under some plausible scenario concerning the size of the labor supply behavioral reactions, non Paretian (e.g. giving negative marginal social weights to the richest class of tax payers).JEL Classification: H11, H21, D63, C63

Revealed social preferences of Dutch political parties

“…Indeed, welfare weights are slightly negative in the baseline. This is found as well in Petersen (2007) and Bourguignon and Spadaro (2012). However, this finding is not universal.…”

“…5 In a robustness check we show that the first anomaly -increasing political weights to the mode -is completely robust to changes in the elasticities. However, the second anomaly -negative political 3 It is typically assumed that social welfare weights are positive and monotonically declining in income due to positive but diminishing marginal utility of private income or concavity in the social welfare function (Bourguignon and Spadaro, 2012). 4 We show this for the 2002 elections.…”

Spend it like Beckham? Inequality and redistribution in the UK, 1983–2004

“…Our approach has many affinities to the optimal income tax literature that started with Mirrlees (1971) but differs in the details from the standard way of setting up these problems. It is perhaps most similar to Bourguignon and Spadaro (2005) in its attempt to back out implicit social weights from observed redistribution.…”

The promise of positive optimal taxation: normative diversity and a role for equal sacrifice

“…assumption and the Rawlsian alternative is low; two, a plurality of respondents prefer a mixed objective. 16 The purely Utilitarian policy (A) makes up only 10 percent of the top-ranked choices and 11 percent of the second-ranked choices. 17 For the Rawlsian alternative, these …gures are 9 percent and 10 percent.…”