Optimal Marginal Tax Rates for Low Incomes: Positive, Negative, or Zero?

Previous studies have shown that the optimal marginal tax rate at the bottom of the income distribution may be positive, negative, or even zero. This paper reexamines this problem in a unified framework and tries to evaluate the arguments. It turns out that the case for positive marginal tax rates is quite strong, whereas negative marginal tax rates seem to be based on a misconception.

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Year of publication:	2002-05
Authors:	Homburg, Stefan
Institutions:	Wirtschaftswissenschaftliche Fakultät, Leibniz Universität Hannover
Subject:	Optimal income taxation \| contract theory \| incentives \| welfare

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Extent:	application/pdf
Series:	Hannover Economic Papers (HEP). - ISSN 0949-9962.
Type of publication:	Book / Working Paper
Notes:	15 pages
Classification:	H2 - Taxation, Subsidies, and Revenue ; D3 - Distribution
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005607015