TY  - JOUR
AU  - Kaplow,Louis
AU  - Shavell,Steven
TI  - The Efficiency of the Legal System versus the Income Tax in Redistributing Income
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4457
PY  - 1994
Y2  - August 1994
UR  - http://www.nber.org/papers/w4457
L1  - http://www.nber.org/papers/w4457.pdf
N1  - Author contact info:
Louis Kaplow
Harvard University
Hauser 322
Cambridge, MA  02138
Tel: 617/495-4101
Fax: 617/496-4880
E-Mail: meskridge@law.harvard.edu

Steven Shavell
Harvard Law School
1575 Massachusetts Avenue
Hauser Hall 508
Cambridge, MA  02138
Tel: 617/495-3668
Fax: 617/496-2256
E-Mail: shavell@law.harvard.edu
AB  - 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.
ER  -