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Redistributive taxation and social insurance

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Cremer, Helmuth Pestieau, Pierre [ULg]

This paper studies the role of social insurance as a redistributive mechanism in presence of an optimal (linear or general) income tax. It considers a second-best setting with two unobservable individual characteristics: ability, measured by the wage rate and risk, measured by the probability of incurring a loss. It shows that both tax progressivity and the optimal level of social insurance crucially depend on the correlation between ability and risk.

Document type Article de périodique (Journal article) – Article de recherche
Access type Accès restreint
Publication date 1996
Language Anglais
Journal information "International Tax and Public Finance" - Vol. 3, no.3, p. 281-295 (July 1996)
Peer reviewed yes
Publisher Springer New York LLC ((United States) New York)
issn 0927-5940
e-issn 1573-6970
Publication status Publié
Affiliation UCL - EUEN/CORE - Center for operations research and econometrics
Keywords redistributive taxation ; social insurance
Links
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Bibliographic reference Cremer, Helmuth ; Pestieau, Pierre. Redistributive taxation and social insurance. In: International Tax and Public Finance, Vol. 3, no.3, p. 281-295 (July 1996)
Permanent URL http://hdl.handle.net/2078.1/141839