The Law and Economics of Redistribution

26 Pages Posted: 27 Nov 2017 Last revised: 10 May 2018

See all articles by Matthew Dimick

Matthew Dimick

University at Buffalo School of Law

Date Written: November 21, 2017

Abstract

Should legal rules be used to redistribute income? Or should income taxation be the exclusive means for reducing income inequality? This article reviews the legal scholarship on this question. First, it traces how the most widely-cited argument in favor of using taxes exclusively — Kaplow & Shavell’s (1994) “double-distortion” argument — evolved from previous debates about whether legal rules could even be redistributive and whether law and economics should be concerned exclusively with efficiency or with distribution as well. Next, it surveys the responses to the double-distortion argument. These responses appear to have had only limited success in challenging the sturdy reputation of the double-distortion argument. Finally, it concludes by highlighting new directions in a debate revived by increasing economic inequality.

Keywords: Inequality, Redistribution, Legal Rules, Taxation, Efficiency, Equity, Social Welfare

Suggested Citation

Dimick, Matthew, The Law and Economics of Redistribution (November 21, 2017). University at Buffalo School of Law Legal Studies Research Paper No. 2017-013. Available at SSRN: https://ssrn.com/abstract=3072678 or http://dx.doi.org/10.2139/ssrn.3072678

Matthew Dimick (Contact Author)

University at Buffalo School of Law ( email )

618 John Lord O'Brian Hall
Buffalo, NY 14260-1100
United States
716-645-7968 (Phone)

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