A Tax Reform Approach to Commodity Taxation with Families

We show that the optimality of uniform commodity taxation applies in a family setting when individuals live in two-adult families and take some decisions collectively. Allowing for household decisions to include intra-family redistribution, family production and public goods, uniform commodity taxation Pareto dominates differential commodity tax-ation when preferences are weakly separable and quasi-homothetic in goods and individual income taxation is linear progressive (Deaton, 1979; Hellwig, 2009), unless family welfare exhibits transferable utility (Chiappori and Gugl, 2020). We extend these results to general weakly separable preferences (Laroque, 2005; Kaplow, 2006), family income taxation and different timing of household decisions.