A note on the taxation of couples under income uncertainty

Giacomo Corneo

No 2011/16, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: An unduly neglected implication of the choice of the tax unit is its impact on the consumption risk carried by taxpayers. As compared to individual taxation, joint taxation with income splitting provides couples with more insurance against the risk of earning inability for one of the spouses. If that risk is not insurable in markets, replacing individual taxation with joint taxation with income splitting can generate a Pareto-improvement.

Keywords: progressive income tax; tax unit; insurance (search for similar items in EconPapers)
JEL-codes: H2 (search for similar items in EconPapers)
Date: 2011
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Related works:
Journal Article: A Note on the Taxation of Couples Under Income Uncertainty (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:201116

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