Lommerud, Kjell Erik; Sandvik, Bjørn; Straume, Odd Rune - 2003
of labour income. Income inequality is caused by the presence of sunk capital investments, which creates a 'good jobs … of investment taxes and progressive income taxation. On the other hand, if unions are strong, we find that the best … latter being the optimal policy if the government is not too concerned about inequality and if the cost of income taxation is …