Lommerud, Kjell Erik; Sandvik, Bjørn; Straume, Odd Rune - 2003
latter being the optimal policy if the government is not too concerned about inequality and if the cost of income taxation is …We analyse the question of optimal taxation in a dual economy, when the government is concerned about the distribution … of labour income. Income inequality is caused by the presence of sunk capital investments, which creates a 'good jobs …