Optimal tax deductions for net losses under private insurance with an upper limit

Rachel J. Huang, Larry Y. Tzeng

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

Kaplow (1992b) shows that governments should not provide a tax deduction for net losses when a private insurance contract is available. However, his findings rest on the assumption that the private insurance is proportional coverage. We find that Kaplow's conclusions may not hold when the private insurance contract contains an upper limit. The findings of our article show that Kaplow's conclusions are sensitive to the assumption that the insurance contract is available in the private market.

Original languageEnglish
Pages (from-to)883-893
Number of pages11
JournalJournal of Risk and Insurance
Volume74
Issue number4
DOIs
StatePublished - Dec 2007

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