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In this paper we allude to a novel role played by the non-linear income tax system in the presence of adverse selection in the labor market due to asymmetric information between workers and firms. We show that an appropriate choice of the tax schedule enables the government to affect the wage...
Persistent link: https://www.econbiz.de/10010888445
widening as migration costs decrease. …
Persistent link: https://www.econbiz.de/10010550243
In this paper we employ a tax-competition model to demonstrate that in the presence of migration the re …-distributive advantage of a non-linear income tax system over a linear (flat) one is significantly mitigated relative to the autarky (no-migration …) equilibrium. When migration threats are sufficiently strong, a coordinated shift from a non-linear (prima-facie superior) system …
Persistent link: https://www.econbiz.de/10009024840