NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Efficiency of the Legal System versus the Income Tax in Redistributing Income

Louis Kaplow, Steven Shavell

NBER Working Paper No. 4457 (Also Reprint No. r1898)
Issued in September 1993
NBER Program(s):   LE

Should legal rules be chosen only on the basis of their efficiency or also on the basis of their distributional effects? This article demonstrates that redistribution accomplished through legal rules is systematically less efficient than redistribution accomplished through the income tax system -- even though the latter distorts incentives to work. In particular. a regime with an inefficient legal rule can be replaced by a regime with an efficient legal rule and a modified income tax system designed so that every person is made better off.

download in pdf format
   (629 K)

email paper

This paper is available as PDF (629 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4457

Published: Journal of Legal Studies, Vol. XXIII, no. 2, pp. 667-681, (June 1994).

Users who downloaded this paper also downloaded these:
Kaplow and Shavell w3822 Optimal Law Enforcement with Self-Reporting of Behavior
Kaplow w5391 How Tax Complexity and Enforcement Affect the Equity and Efficiency of The Income Tax
Kaplow w12061 Taxation
Kaplow and Shavell w6960 Economic Analysis of Law
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us