Health, fairness and taxation View Full Text


Ontology type: schema:ScholarlyArticle      Open Access: True


Article Info

DATE

2014-06

AUTHORS

Giacomo Valletta

ABSTRACT

We consider a model where agents differ in their preferences about consumption labor and health, in their (health-dependent) earning ability, and in their health disposition. We study the joint taxation of income and health expenditure, under incentive-compatibility constraints, on the basis of efficiency and fairness principles. The fairness principles we consider propose, on one side, to reduce inequalities deriving from factors that do not depend on individuals’ responsibility. On the other side, redistribution should be precluded at least when all agents in the economy have equal physical characteristics. We construct, on the basis of such principles, a particular social welfare function. Then we give the explicit formula for the comparison of tax policies: we prove that a tax reform should always benefit agents with the worst earning ability and the worst health disposition first. Finally, in some cases, at the bottom of the income distribution the optimal tax scheme should exhibit non-uniform tax rates over health expenditure and non-positive average marginal tax rates over income. More... »

PAGES

101-140

Journal

TITLE

Social Choice and Welfare

ISSUE

1

VOLUME

43

Author Affiliations

Identifiers

URI

http://scigraph.springernature.com/pub.10.1007/s00355-013-0768-5

DOI

http://dx.doi.org/10.1007/s00355-013-0768-5

DIMENSIONS

https://app.dimensions.ai/details/publication/pub.1032275700


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