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Although the U.S. has a more progressive tax system than many other high-income countries, its overall fiscal system does less to reduce inequality because its tax system is smaller (OECD 2008). What societal preferences can explain these cross-country differences? We address this question by computationally solving a two-bracket optimal tax problem with lump sum redistribution. In this framework, a social planner can achieve redistributive goals by selecting progressive tax rates or scaling up the entire tax system to fund a larger transfer. We find that planners who exhibit stronger inequality aversion prefer tax systems that are similarly or slightly less progressive, but substantially larger, than the tax systems chosen by planners who exhibit weaker inequality aversion. These larger tax systems, like those in other high-income countries, result in greater reduction in inequality. In addition, planners who favor middle-income individuals or both low-and middle-income individuals (e.g., the bottom 99 percent of the distribution) prefer smaller, more progressive tax systems than planners who favor the lowest-income individuals. These smaller tax systems, like that of the U.S., result in less reduction in overall inequality., I. Introduction In 2008, the Organisation for Economic Cooperation and Development (OECD) released a report suggesting that the U.S. has one of the most progressive tax systems--defined as the greatest [...]

Abstract This paper investigates whether two legislative changes aimed at empowering women did in fact lower the risk of domestic violence for women in India. We use the National Family [...]

Statistics focusing on annual household-level income indicate that inequality has increased in the United States in recent decades. Are these measures accurate? Inequality has traditionally been calculated in the United States in terms of annual cash income alone, but other, more comprehensive points of measurement should be considered. For maximum accuracy, income should include the value of in-kind benefits and be measured over a lifetime rather than a year. But even this adjusted number is inadequate to assess fairness, which requires looking at a broader picture of overall well-being that includes income mobility, access to education, consumption, leisure, and health. Additionally, we must develop better measures of opportunity, which is a more accurate indicator of well-being than income distribution. Broadening the definition of and approach to inequality would help build more opportunity and result in more useful policy., A number of recent studies have highlighted two facts about US income distribution. The first is that income inequality has been rising, and this increase has occurred throughout the income [...]

In this article, Mathur, Slavov, and Strain respond to the argument by Peter Diamond and Emmanuel Saez that the socially optimal top marginal income tax rate is around 73 percent, [...]

Using data from two detailed, nationally representative, household datasets--the National Family Health Survey and the India Human Development survey--we explore whether women who are economically empowered (through work, earnings, or wealth) are less likely to experience domestic violence. We find that, while working women may be at a greater risk of violence, higher earnings are associated with a reduction in violence. Although these findings are informative, they do not necessarily establish a causal link between economic empowerment and violence. To test for causality, we exploit arguably exogenous variation in state laws designed to equalize the inheritance rights of sons and daughters. Additional variation comes from the fact that these state laws did not apply to some women based on their religious affiliation and date of marriage. We find some evidence that women who were subject to these laws are less likely to report being victims of domestic violence. Keywords: Domestic Violence, Inheritance Laws, Women's Empowerment JEL Codes: J12, J18, K11, 1. Introduction Violence against women takes place in all countries and all cultures. However, the problem is particularly severe in India. A 2012 survey by Thomson Reuters Foundation ranks India [...]

In two recent cases, the US Supreme Court considered constitutional challenges to the federal Defense of Marriage Act--which denies federal recognition of same-sex marriage--and to California's Proposition 8, a constitutional amendment banning same-sex marriage. Regardless of the outcomes of these two cases, the controversy over same-sex marriage highlights an important tax policy question: should the US tax code treat people as families, as it currently does, or as individuals? This paper considers the costs and benefits of switching to a tax system based on individual, rather than family, income., Proponents of same-sex marriage often argue that not recognizing same-sex unions is unfair because many federal and state laws treat married couples as a unit. One example is tax law: [...]

Entitlement spending is projected to put a great deal of strain on the federal budget in coming years. A key factor underlying the growth of entitlement spending is the deteriorating ratio of workers to retirees. This problem is exacerbated by various policies that create disincentives for work at older ages. One way to reduce the fiscal burden of entitlement programs is to encourage longer working lives by minimizing these disincentives. This paper documents the recent trends in employment among older workers, summarizes the evidence on how policies influence retirement decisions, and describes several reforms that have the potential to increase employment among older workers., Most policymakers are painfully aware that entitlement programs are becoming less solvent. The main factors contributing to this looming insolvency are rising health care costs, slower population growth, and longer [...]