Promoting education under distortionary taxation
Haaparanta, Pertti; Shankar, Ravi; Paukkeri, Tuuli; Pirttilä, Jukka; Tuomala, Matti (2019-03)
Haaparanta, Pertti
Shankar, Ravi
Paukkeri, Tuuli
Pirttilä, Jukka
Tuomala, Matti
UNU-WIDER
03 / 2019
Kuvaus
nonPeerReviewed
Tiivistelmä
How does the public provision of education and the deployment of distortionary tax and subsidy instruments differ when the government’s objective is conventional welfarist compared to when the objective is the non-welfarist one of equality of opportunity?
This paper develops a framework in which the tax and provision rules in the two settings can be easily compared and contrasted. A range of results are derived which help to answer questions such as whether it is the case that progressive taxation is not used at all under opportunities-based objectives. We show that progressive taxation still plays a role in achieving the objective of equal opportunities, and illustrate how its use may differ under the two objectives.
We also show how the provision of public education depends on how private education choices respond, especially the differential responses by higher- and lower-income families. These themes reflect concerns in the policy discourse, and our framework provides an entry point into a systematic exploration of a broad range of issues in comparing the consequences of welfarist and equality of opportunity objectives.
This paper develops a framework in which the tax and provision rules in the two settings can be easily compared and contrasted. A range of results are derived which help to answer questions such as whether it is the case that progressive taxation is not used at all under opportunities-based objectives. We show that progressive taxation still plays a role in achieving the objective of equal opportunities, and illustrate how its use may differ under the two objectives.
We also show how the provision of public education depends on how private education choices respond, especially the differential responses by higher- and lower-income families. These themes reflect concerns in the policy discourse, and our framework provides an entry point into a systematic exploration of a broad range of issues in comparing the consequences of welfarist and equality of opportunity objectives.
Tutkimusteema
Sosiaaliturva, verotus ja tulonjako, Social security, taxation and inequality, Yritystoiminnan sääntely ja kansainvälinen talous, Business regulation and international economics
JEL
H21, H40, O12
Avainsanat
educational subsidies, equality of opportunity, income taxation, inequality, public goods provision