Tax policy reform favors middle-income households over the poorest, study finds.
The article analyzes how changes in tax policies affect social welfare by studying individual utilities within households. By using a collective model of household labor supply and a simulation of the French tax system, the researchers found that a tax reform in France had mixed effects. The reform discouraged second-earners from working more, but did not specifically help the poorest households. The study also showed that whether you look at households or individuals can change the results of the analysis.