This paper rethinks the design of the income tax by assuming that the objective of the tax is not to redistribute from … earnings, a motivation for the tax proposed in Buchanan (1976). The income tax provides insurance by collecting money on net … states to offer heterogeneous tax/transfer programs, each state attracting a different clientele in the population. Given the …

Should a nation's tax system become more progressive as it opens to trade? Does opening to trade change the benefits of … a progressive tax system? We answer these question within a standard incomplete markets model with frictional labor … welfare losses. A progressive tax system is valuable, as it substitutes for imperfect insurance and redistributes the gains …

: democracy does not lead to a uniform decline in post-tax inequality, but can result in changes in fiscal redistribution and …In this paper we revisit the relationship between democracy, redistribution and inequality. We first explain the … theoretical reasons why democracy is expected to increase redistribution and reduce inequality, and why this expectation may fail …

This paper examines the distributional and behavioral effects of the Earned Income Tax Credit (EITC). We chart the … growth of the program over time, and argue several expansions show that real responses to taxes are important. We use tax … data to show the distribution of benefits by income and family size, and examine the impacts of hypothetical reforms …

In a series of major expansions starting in 1987, the earned income tax credit (EITC) has become a central part of the … federal government's anti-poverty strategy. In this paper, we examine the impact of the Tax Reform Act of 1986 (TRA86), which …

provide the first comprehensive estimates of this central safety net policy on the full distribution of after-tax and transfer … income. We use a quasi-experiment approach, using variation in generosity due to policy expansions across tax years and … employment and a 9.4 percentage point reduction in the share of families with after-tax and transfer income below 100% poverty …

The purpose of the present note is to explore the structure of optimal income taxation/redistribution in an economy … where the welfare of individuals depends in part on relative after-tax consumption, i.e., we specify individual welfare as a … function of absolute and relative after-tax consumption, with diminishing marginal utility to each. With such a specification …

targeting tax credits to poor Americans who live in distressed places. A calibration exercise finds optimal transfers of the …

This paper estimates the total value that individuals derive from their state's tax-and-transfer program, and shows how … analysis of the determinants of changes in the value of state net benefits over a more than 30-year period. We find that the … redistributive value of state tax-and-transfer programs sharply declines with income, but that the insurance value of transfers is …