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Optimal taxation, inequality and top incomes
Andrienko, Jurij; Apps, Patricia; Rees, Ray - 2014
In a number of high-income countries over the past few decades there has been a large growth in income inequality and at the same time a shift in the burden of taxation from the top to the middle of the income distribution. This paper applies the theory of optimal piecewise linear taxation to...
Persistent link: https://www.econbiz.de/10010374096
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Welfare improving tax evasion
Canta, Chiara; Cremer, Helmuth; Gahvari, Firouz - 2020
We study optimal income taxation in a framework where one's willingness to report his income truthfully is positively correlated with his type. We show that allowing low-productivity types to cheat leads to Pareto-superior outcomes as compared to deterring them, even if audits can be performed...
Persistent link: https://www.econbiz.de/10012252256
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Long-term changes in married couples' labor supply and taxes : evidence from the US and Europe since the 1980s
Bick, Alexander; Brüggemann, Bettina; … - 2018
We document the time-series of employment rates and hours worked per employed by married couples in the US and seven European countries (Belgium, France, Germany, Italy, the Netherlands, Portugal, and the UK) from the early 1980s through 2016. Relying on a model of joint household labor supply...
Persistent link: https://www.econbiz.de/10011913193
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Optimal income taxation with unemployment and wage responses : a sufficient statistics approach
Kroft, Kory; Kucko, Kavan; Lehmann, Etienne; Schmieder, … - 2016
We derive a sufficient statistics optimal tax formula in a general model that incorporates unemployment and endogenous wages, to study the shape of the tax and transfer system at the bottom of the distribution. The sufficient statistics are the macro employment response to taxation and the micro...
Persistent link: https://www.econbiz.de/10011452220
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Higher tax and less work : an optimal response to relative income concern
FitzRoy, Felix R.; Jin, Jim Y.; Nolan, Michael A. - 2019
with the Joneses" (KUJ), while increasing use of social media and growing inequality encourage comparison. Models with one … distribution of wages with intensive and extensive margins of labour supply, both of which are increased by comparison. The optimal … tax response increases with comparison, but, surprisingly, dominates the comparison effect and reduces individual labour …
Persistent link: https://www.econbiz.de/10012034986
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Human capital and optimal redistribution
Koeniger, Winfried; Prat, Julien - 2014
We characterize optimal redistribution in a dynastic family model with human capital. We show how a government can improve the trade-off between equality and incentives by changing the amount of observable human capital. We provide an intuitive decomposition for the wedge between human-capital...
Persistent link: https://www.econbiz.de/10010440541
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Combining microsimulation and optimization to identify optimal flexible tax-transfer rules
Colombino, Ugo; Islam, Nizamul - 2020
We use a behavioural microsimulation model embedded in a numerical optimization procedure in order to identify optimal (social welfare maximizing) tax-transfer rules. We consider the class of tax-transfer rules consisting of a universal basic income and a tax defined by a 4th degree polynomial....
Persistent link: https://www.econbiz.de/10012228537
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The case for NIT+FT in Europe : an empirical optimal taxation exercise
Islam, Nizamul; Colombino, Ugo - 2017
We present an exercise in empirical optimal taxation for European countries from three areas: Southern, Central and Northern Europe. For each country, we estimate a microeconometric model of labour supply for both couples and singles. A procedure that simulates the households' choices under...
Persistent link: https://www.econbiz.de/10011762204
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Smooth income tax schedules : derivation and consequences
Estévez Schwarz, Diana; Sommer, Eric - 2018
Existing tax schedules are often overly complex and characterized by discontinuities in the marginal tax burden. In this paper we propose a class of progressive smooth functions to replace personal income tax schedules. These functions depend only on three meaningful parameters, and avoid the...
Persistent link: https://www.econbiz.de/10011853540
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The optimal graduated minimum wage and social welfare
Danziger, Eliav; Danziger, Leif - 2018
This paper analyzes the effects of introducing a graduated minimum wage in a model with optimal in-come taxation in which a government seeks to maximize social welfare. It shows that the optimal graduated minimum wage increases social welfare by increasing the lowproductivity workers'...
Persistent link: https://www.econbiz.de/10011810325