ON THE OPTIMAL FISCAL TREATMENT OF FAMILY SIZE

Alessandro Balestrino

CHILD Working Papers from CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY

Abstract: Should a benevolent social planner subsidise family size? Typically, contributions assuming exogenous fertility yield an a¢rmative answer, while those assuming endogenous fertility do not reach de…nite conclusions. We re-examine the endogenous fertility model, and …nd that when redistribution is accomplished mostly using non-income taxes, there is indeed a case for subsidising the number of children, as long as poor families tend to have more children. Instead, when redistribution is pursued prevalently using a non-linear income tax, the above rationale for children subsidisation disappears. We …nally argue that whether children are a tax asset or a tax liability depends however on all the policy instruments, and not only on the tax treatment of family size.

Keywords: endogenous fertility; taxation of family size; optimal linear and non-linear taxation; vertical equity (search for similar items in EconPapers)
JEL-codes: D13 H21 H31 J13 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2001-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: On the Optimal Fiscal Treatment of Family Size (2002)
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