Optimal Mechanisms for Income Transfers.
Expert InsightsPublished 1968
The problem of determining the optimal assistance program for the poor is analyzed as a two-move, nonzero-sum game. Negative income tax plans with constant marginal tax rates, and restricted transfer plans, are considered. It is found that despite the administrative problems involved, a multiple-plan program offering at least one negative marginal tax rate plan may very well dominate any negative income tax program that employs positive marginal tax rates. It may cost less, be preferred by all transfer recipients, provide a greater incentive for work, and yield a more equal distribution of income. 41 pp.
Document Details
- Copyright: RAND Corporation
- Availability: Web Only
- Year: 1968
- Pages: 41
- DOI: https://doi.org/10.7249/pubs
- Document Number: P-3878
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