Income taxation of couples and the tax unit choice

Résumé

We study the optimal income taxation of couples. We determine the resulting intra-family labor supply allocation and its implication for the choice of the tax unit (individual versus joint taxation). We provide a general condition for full joint taxation to arise. We also study how the spouses’ respective labor supply decisions are distorted when the condition does not hold. In particular, we show that, depending on the pattern of mating, the celebrated result according to which the spouse with the more elastic labor supply faces the lower marginal tax rates may or may not hold in our setting.

Codes JEL

Remplace

Helmuth Cremer, Jean-Marie Lozachmeur et Pierre Pestieau, « Income Taxation of Couples and the Tax Unit Choice », CORE DP , n° 13, 2007.

Helmuth Cremer, Jean-Marie Lozachmeur et Pierre Pestieau, « Income Taxation of Couples and the Tax Unit Choice », CESifo Working Papers, 2009.

Référence

Helmuth Cremer, Jean-Marie Lozachmeur et Pierre Pestieau, « Income taxation of couples and the tax unit choice », Journal of Population Economics, vol. 25, n° 2, 2012, p. 763–778.