Heathcote, Jonathan; Tsujiyama, Hitoshi - C.E.P.R. Discussion Papers - 2015
redistributes primarily via marginal tax rates that rise with income, and replacing it with a flat tax system, in which marginal tax … preferred specification, moving to the optimal flat tax policy reduces welfare, whereas moving to the optimal fully nonlinear … associated with distorting the allocation of labor input? Many authors have advocated scrapping the current tax system, which …