Individual vs. Joint Taxation in Models with Household Production
CES Working Paper at Univ. of Munich No. 147
Posted: 7 Apr 1998
Date Written: October 1997
In a recent paper, Piggott and Whalley (1996) argue for the superiority of joint taxation over individual taxation on the grounds that the "conventional wisdom" ignores the existence of household production, and that in the presence of this the usual Ramsey-type argument breaks down. We show in a formal model of 2-person households with domestic production that this is not in fact the case: individual taxation will in general be superior and the grounds on which it can be shown to be so involve a standard Ramsey-like condition.
JEL Classification: H21, H31, J22
Suggested Citation: Suggested Citation