Inequality minimising subsidy and taxation

Satya Chakravarty and Palash Sarkar ()
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Palash Sarkar: Indian Statistical Institute

Economic Theory Bulletin, 2022, vol. 10, issue 1, No 5, 53-67

Abstract: Abstract We address the problem of procuring a certain amount of tax from the individuals in a society together with allocating a specific quantity of subsidy to the same set of individuals in an inequality minimising manner, where the tax and subsidy sizes need not be the same. If the combined tax-subsidy schedule does not modify the aggregate income, then Fei’s (Econometrica 49:869–881, 1981) inequality minimising solution for a balanced budget plan becomes a particular case of our tax-subsidy program, considered in a more general and practical situation in which the subsidy and tax aggregates may not be equal.

Keywords: Subsidy; Tax; Minimum inequality; Constrained equal award; Lorenz domination (search for similar items in EconPapers)
JEL-codes: D31 D63 H24 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s40505-022-00218-2

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