Redistributive taxation and personal bankruptcy in US states
By: by Charles Grant, Winfried Koeniger.
Contributors: Koeniger, Winifried.
Series: Discussion paper ;; no. 1805; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1805
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Progressive taxation -- United States -- States.; Bankruptcy -- United States -- States.
Description: "Both personal bankruptcy and redistributive taxes can insure households' consumption risk and both vary considerably across US states. We derive sufficient conditions under which more redistributive taxation makes bankruptcy exemptions less attractive both for the intratemporal insurance and for inter-temporal consumption smoothing. Exploiting data variation over time for 18 US states 1980-2003, we find considerable support for our model's predictions: (i) redistributive taxation and bankruptcy exemptions are negatively correlated; (ii) both policies are associated with more equal consumption growth whereas the effect on unsecured household debt is less clear-cut"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Includes bibliographical references.
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