Loading...
When Should the Legal System Help Redistribute Income?
Liscow, Zachary Goldin, Jacob
Liscow, Zachary
Goldin, Jacob
Collections
Citations
Altmetric:
Abstract
The article examines when legal rules should incorporate income redistribution goals rather than focus solely on efficiency, especially given the availability of income taxation as a redistributive tool. It reviews the traditional law and economics view that efficient legal rules combined with income taxes optimally promote social welfare, but identifies conditions under which redistributive legal rules may be preferable. These conditions include income-varying preferences, income tax evasion, incomplete salience of legal rules, and activities that generate government revenue, as well as political and institutional constraints limiting tax reform. The authors emphasize that the desirability of redistributive legal rules depends on empirical factors and the feasibility of complementary income tax adjustments, highlighting the complexity of designing legal rules that balance efficiency and equity.