Optimal linear redistributive tax and pension systems with flexible labor supply

Arbeitspapier

The tax system redistributes labor incomes among workers, the pension system redistributes incomes from workers to pensioners. We consider a linear transfer system, where workers pay pension contributions and personal income taxes and pensioners receive proportional benefits, while workers and pensioners enjoy basic income. Every worker maximizes his discounted lifetime utility function, depending on young- and old-age consumption plus leisure. The government chooses a transfer system which maximizes the undiscounted social welfare function. Our major result is as follows: The optimal transfer system balances the efficiency of proportional pensions and the guarantee of the basic income.

Object Details

• ISBN: 978-615-5243-37-0
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IEHAS Discussion Papers ; No. MT-DP - 2012/33

Classification and Topics

• Classification: Wirtschaft ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes ; General Welfare; Well-Being ; Time Allocation and Labor Supply ; Retirement; Retirement Policies
• Subject: personal income tax ; pension system ; optimal redistribution ; Steuersystem ; Einkommensteuer ; Gesetzliche Rentenversicherung ; Verteilungsgerechtigkeit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Simonovits, András
• Event: Veröffentlichung
• (who): Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies
• (where): Budapest
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/108275
• Last update: 10.03.2025, 11:42 AM CET