Gender-Based and Couple-Based Taxation

Spencer Bastani

No 2012:6, Working Paper Series, Center for Fiscal Studies from Uppsala University, Department of Economics

Abstract: In a recent paper Alesina et al. (2011) construct a model in which different labor supply elasticities for men and women emerge endogenously from intra-household bargaining. In this paper I explore the optimal tax implications of their model in an economy with both singles and couples and inequality across as well as within households. In the model, the welfare of married women can be improved by lowering taxes for single women. Moreover, if single men earn more than single women, the welfare of married women can alternatively be improved by a gender-neutral tax scheme which taxes singles at a higher rate. Because the government is concerned not only with equalizing utilities within families, but also with the redistribution between high income and low income households, gender-based adjustments in the income tax must be weighed against the welfare consequences of changing the progressivity of the tax system. I find that larger lump-sum transfers to women is always optimal. Interestingly, marginal tax rates, on the other hand, should be lower for women only if the exogenous bargaining power of men is moderate. The welfare gains of gender based taxation are sizable and the welfare gains of having tax instruments which depend on household composition are even larger.

Keywords: optimal taxation; tagging; family economics; intra-household bargaining (search for similar items in EconPapers)
JEL-codes: D13 H21 J16 J20 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2012-03-28
New Economics Papers: this item is included in nep-acc, nep-dem, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published as Bastani, Spencer, 'Gender-Based and Couple-Based Taxation' in International Tax and Public Finance , 2013, pages 653-686.

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Journal Article: Gender-based and couple-based taxation (2013)
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