substantial drop of median income and a remarkable income growth at the top 0.1% of the income distribution. The increase of … income inequality was stronger in East Germany than in West Germany. In both regions, the income concentration process … obtains its income from business and capital, the income share that it receives in form of wage income is increasing. …

This paper analytically derives optimal top marginal tax rates when couples are taxed according to income splitting … between spouses, consumption is taxed, and the skill distribution is unbounded. Optimal top marginal income tax rates are then …