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Cover von: On the Optimal Fiscal Treatment of Family Size
Alessandro Balestrino

On the Optimal Fiscal Treatment of Family Size

Rubrik: Articles
Jahrgang 58 (2002) / Heft 2, S. 140-157 (18)
Publiziert 09.07.2018
DOI 10.1628/0015221022905704
Veröffentlicht auf Englisch.
inkl. gesetzl. MwSt.
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Should a benevolent social planner subsidize family size? Typically, contributions assuming exogenous fertility yield an affirmative answer, while those assuming endogenous fertility do not reach definite conclusions. We re-examine the endogenous fertility model, and find that when redistribution is accomplished mostly using non-income taxes, there is indeed a case for encouraging fertility, as long as poor families tend to have more children. Instead, when redistribution is mainly pursued using a non-linear income tax, the above rationale for child subsidization disappears. We finally argue that whether children are a tax asset or a tax liability depends, however, on all the policy instruments, and not only on the tax treatment of family size.