Reducing the Excess Burden of Subsidizing the Stork: Joint Taxation, Individual Taxation, and Family Tax Splitting

Volker Meier and Matthias Wrede

No 2470, CESifo Working Paper Series from CESifo

Abstract: Analyzing a homogenous household setting with endogenous fertility and endogenous labor supply, we demonstrate that moving from joint taxation to individual taxation and adapting child benefits so as to keep fertility constant entails a Pareto improvement. The change is associated with an increase in labor supply and consumption and a reduction of the marginal income tax, while the child benefit may move in either direction. Similarly, a move from joint taxation to some scheme of family tax splitting increases labor supply and welfare.

Keywords: income taxation; fertility; splitting; labor supply (search for similar items in EconPapers)
JEL-codes: H21 H24 H31 J18 J22 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Reducing the excess burden of subsidizing the stork: joint taxation, individual taxation, and family tax splitting (2013)
Working Paper: Reducing the excess burden of subsidizing the stork: Joint taxation, individual taxation, and family tax splitting (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2470

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