There is clear evidence that fairness plays a role in redistribution. Individuals want tocompensate others for their misfortune, while they allow them to enjoy the fruits of their effort.Such fairness considerations have been introduced in political economy and optimal incometax models with a...

Payroll taxes represent a major distortionary influence of governments on labor markets. Thispaper examines the role of payroll taxation and the social safety net for cyclical fluctuations ina nonmonetary economy with labor market frictions and unemployment insurance, when thelatter is only...

This paper analyzes the response of earnings to payroll tax rates using a cohort-basedreform in Greece. All individuals who started working on or after 1993 face permanently amuch higher earnings cap for payroll taxes, creating a large and permanent discontinuity inmarginal payroll tax rates by...