Family size and optimal income taxation

This paper studies the role of family size in the design of optimal income taxation. We consider a second best setting where the government observes the number of children and the income of the parents but not their productivity. With a linear tax schedule the marginal tax rate is shown to decrease with the number of children, while the relationship between the demogrant and family size appears to be ambiguous. With two ability levels, optimal non-linear income tax implies zero marginal tax rates for the higher ability parents; low ability parents have positive marginal tax rates that decrease with family size.

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Document type	Article de périodique (Journal article) – Article de recherche
Access type	Accès restreint
Publication date	2003
Language	Anglais
Journal information	"Journal of Population Economics" - Vol. 16, no.1, p. 37-54 (February 2003)
Peer reviewed	yes
Publisher	Springer ((Germany) Heidelberg)
issn	0933-1433
e-issn	1432-1475
Publication status	Publié
Affiliation	UCL - EUEN/CORE - Center for operations research and econometrics
Keywords	Family size ; optimal taxation
Links	http://hdl.handle.net/2078.1/142255[Handle] https://doi.org/10.1007/s001480100113[DOI]

See also
	[boreal:4175]	Family size and optimal income taxation