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Is Fiscal Progressivity Enhanced by Redistribution in Kind?
Author(s) -
Pettini A.
Publication year - 1999
Publication title -
annals of public and cooperative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.526
H-Index - 37
eISSN - 1467-8292
pISSN - 1370-4788
DOI - 10.1111/1467-8292.00127
Subject(s) - redistribution (election) , economics , redistribution of income and wealth , cash , microeconomics , adverse selection , monetary economics , public economics , macroeconomics , public good , politics , political science , law
This paper considers the redistributive effects of four mixed fiscal systems in which redistribution in cash is combined with redistribution in kind. A private good is offered by both the public and the private sector, at a non‐zero price in both cases, so that the market is vertically segmented and the quality differences are used to select recipients on the basis of their income. This paper shows how an appropriate selection of recipients can add redistributive power to an already redistributive taxation system, while universal public provision never does. A numerical simulation gives some policy insights.