Optimal redistribution when different workers are indistinguishable

Maurice Marchand, Pierre Pestieau and Maria Racionero

No 2003018, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Using the standard non linear income and commodity taxation framework this paper examines the optimal policy to be adopted when the same labor disutility can receive two opposite interpretations: taste for leisure and activity limitation. In the absence of complete information about individual characteristics, an income tax does not allow to distinguish lazy from handicapped individuals. One may however rely on a combination of commodity and income taxes to redistribute from the former to the latter when they differ in their preferences for commodities.

Keywords: optimal non-linear taxation; quasi-linear preferences; asymmetric information (search for similar items in EconPapers)
JEL-codes: H21 H41 (search for similar items in EconPapers)
Date: 2003-02
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Citations: View citations in EconPapers (20)

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Journal Article: Optimal redistribution when different workers are indistinguishable (2003)
Journal Article: Optimal redistribution when different workers are indistinguishable (2003)
Working Paper: Optimal redistribution when different workers are indistinguishable (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2003018

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