Conesa, Juan Carlos; Krueger, Dirk - Centro de Análisis y Estudios Ríos Pérez (CAERP) - 2002
This paper computes the optimal progressivity of the income tax code in a dynamic general equilibrium model with household heterogeneity in which uninsurable labor productivity risk gives rise to a nontrivial income and wealth distribution. A progressive tax system serves as a partial substitute...