Gender Tax Wars

An interesting discussion on gender-based taxation by Alberto Alesina and Andrea Ichino from Harvard and Bologna with real world touch to it, basically meaning perfect-marketeers need not apply past the first few pages.

The basic fundament is that taxes are inefficient and introduce deadweight losses, and the question is to minimize the losses and thus optimize efficiency of the taxing regimes.


An abstract can be found below:

"...March 5, 2007
Abstract
Women elasticity of the labor supply is substantially higher than
that of men. The theory of optimal taxation implies that tax rates
on income should be lower for women than for men. We analyze this
argument in detail and show that given existing estimates of elasticities
the optimal tax rates on men and women could be quite different.
We also discuss how gender based taxation would interact with other
policies having to do with possible gender discrimination in the labor
market, with equity and with the social costs and benefits of increasing
women participation in market activities...."

And in for Conclusions:

"..

4 Discussion and Conclusions

Taxing labor income of women less than that of men satisfies criteria of optimal
taxation, given the different elasticity of the labor supply of women and
men and the gender differences in the hazards of the earnings distributions.

In other words, one could obtain more tax revenue with the same average
tax rates by reducing the rates on women of a certain amount and increasing
that of men by less. Even considering cross elasticities between husbands
and wives the differences between the tax rates of males and females could
be quite large if, as it appears from the available empirical evidence, the elasticities
of male and female labor supply are very different. Using estimates
for the USA the female tax rate should be no greater than about 80% of that
of males and possibly much less. Note that the current US tax code that
implies adding husbands and wives’ income for income tax purposes go in
the opposite direction of optimality, since the income of the second earner
(typically the wife) is taxed at a higher rate. Therefore not adding the salary
of husbands and wives for income tax purposes would be a move in the right
direction.

For Italy and Norway, which are at the opposite extremes as far
as gender differences in elasticities are concerned, the female tax rate should
be at most 68% of the male rate in the first country and 91% in the second
one...."

Interesting conclusions for Italy and Norway, with a hint at long time matriarchal policies in Scandinavian countries.