How does family based taxation perform

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An enduring debate among public finance economists concerns the desirability of individual or family-based taxation. Assuming that we want a tax system that is progressive, marriage-neutral, and satisfies horizontal equity. Using a simple example, explain:

How does individual based taxation perfom with the three criteria above? Explain.

How does family based taxation perform? Explain.

Given the above results, which unit of taxation would you prefer?

How does the spousal tax credit overcome some of the problems with individual based taxation above?

Taxes are generally considered to be inefficient and generate excess burdens. Using a simple framework, and with reference to a social welfare function and utility possibilities curve, explain why the inefficiency of taxes might be desirable for a society. Also, describe a situation in which a tax would increase efficiency.

Reference no: EM131027498

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