TY  - RPRT
        AU  - Isaak, Niklas
AU  - Jessen, Robin
        TI  - Normative Judgments Implicit in the Tax System: A Simulation Approach
        PY  - 2024/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17566
        UR  - https://www.iza.org/index.php/publications/dp17566
        AB  - How much does society value redistribution? The common method to derive inverse-optimum welfare weights is by inverting an optimal-tax model. Our alternative imposes fewer restrictions on labor supply and enables comparisons across household types. We use a structural labor supply model to calculate the marginal value of public funds for various small tax reductions, directly linked to welfare weights. An application to Germany finds: i) The tax-transfer system is optimal if society values one additional Euro for the bottom decile three times as much as for the median. ii) At low-medium incomes, weights for couples exceed those for singles substantially.
        KW  - inverse optimum
KW  - microsimulation
KW  - marginal value of public funds
KW  - social welfare function
KW  - optimal taxation
KW  - labor supply
KW  - efficiency
        ER  -