André Decoster, Peter Haan

Welfare Effects of a Shift of Joint to Individual Taxation in the German Personal Income Tax

Section: Articles
FinanzArchiv (FA)

Volume 70 () / Issue 4, pp. 599-624 (26)

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We empirically derive the welfare effects of a shift from joint to individual taxation of married households in Germany. For the welfare evaluation we estimate the preference heterogeneity and use normative welfare concepts proposed by Fleurbaey (2006) to address the difficulties of comparison between and aggregation of heterogeneous agents. Our results suggest that the normative choice of the welfare metric can be crucial, in particular for the simple question who are the gainers and who are the losers in a reform. Further, we find that it is possible to design a system of individual taxation that would be welfare-improving for different welfare metrics.

André Decoster No current data available.

Peter Haan No current data available.