Abstract :
[en] We study optimal redistributive taxes when individuals differ in two
characteristics—earning ability and leisure needs—assumed to be imperfectly correlated.
Individuals have private information about their abilities but needs are observable.
With different levels of observable needs the population can be separated into
groups and needs may be used as a tag.We first assume that the social planner considers
individuals should be compensated for their leisure needs and characterize the optimal
redistributive policy, and the extent of compensation for needs, with tagging.We also
consider an alternative social objective where individuals are deemed responsible for
their needs.
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