Optimal taxation, prudence and risk-sharing

• 成果类型: Article
• 署名作者: Low, H; Maldoom, D
• 署名单位: University of Cambridge
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(02)00225-6
• 发表日期: 2004
• 页码: 443-464
• 关键词: prudence; risk sharing; optimal taxation

摘要

This paper analyses optimal income taxation as a trade-off between the incentive effects of increased uncertainty and the welfare benefits of social insurance. Greater prudence increases labour supply because of precautionary incentive effects which reduce the progressivity of the optimal income tax schedule. Increased uncertainty increases progressivity of the income tax schedule because of a greater value of social insurance. Optimal tax progressivity depends on the ratio of prudence to risk aversion: when this ratio is high, incentive effects dominate the social insurance effect, leading to declining optimal income tax rates. (C) 2003 Elsevier B.V. All rights reserved.