Jacobs, Bas - In: International Tax and Public Finance 20 (2013) 2, pp. 312-337
This paper studies optimal linear and non-linear income taxes and education subsidies in two-type models with … present or not. Hence, education subsidies should not be used for distributional reasons. Due to general equilibrium effects … redistribution. The high-skilled type optimally has a negative marginal income tax rate and a positive marginal education subsidy …