All in the Family: Assessing Need in the Fiscal Unit
"All in the Family: Assessing Need in the Fiscal Unit,"
Canadian Tax Journal, Vol. 70, No. SS, pp. 209-230. DOI
Abstract:
I contrast how the neediness of families is measured in fiscal units used for taxation and economic units used for wellbeing analysis. I make three contributions. First, I identify ways in which the economic unit and fiscal unit are in discord and argue why this matters. Second, I present evidence that the discord between the measured neediness of economic and fiscal units is prevalent. About 28% of Canadians live in economic units that differ from their fiscal units. Third, I argue that this discord is quantitatively relevant using two case studies. For the measurement of poverty, about half of people living in fiscal units that appear needy when considering only the fiscal unit’s income are not below the official poverty line when the economic unit income is used. In the other case study I find that a proposed basic income scheme spends almost two-thirds of its budget on people not in poverty and 40% on children age 18+ living with their parents.