Taxation of Couples under Assortative Mating

Alexander Frankel

American Economic Journal: Economic Policy, 2014, vol. 6, issue 3, 155-77

Abstract: I present a simple and tractable model of the optimal taxation of married couples, working off of the multidimensional screening framework of Armstrong and Rochet (1999). In particular, I study how the tax code varies with the degree of assortative mating. One result is that the "negative jointness" of marginal tax rates found in Kleven, Kreiner, and Saez (2007, 2009) for couples with uncorrelated earnings should be attenuated in the presence of assortative mating. When mating is sufficiently assortative, the optimal tax schedule is separable: an individual's taxes do not depend on his or her spouse's income.

JEL-codes: D82 H21 H24 J12 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/pol.6.3.155
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Citations: View citations in EconPapers (25)

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