characterize optimal marginal tax rates and interpret them in terms of redistribution, insurance and incentive effects. The case of …We study optimal nonlinear income taxation when earnings can differ because of both ability and luck, so the income tax … has both a redistributive role and an insurance role. A substantial literature on optimal redistribution in the absence of …

nonlinear income tax. Deaton showed that with an optimal linear progressive income tax, commodity taxes are superfluous under … weakly separable and linear Engel curves. Using the latter case as an example, we derive two main results. If the income tax … is less progressive than optimal, necessities should bear a lower tax rate than luxuries. If low-income households are …

This paper deals with optimal income taxation under labor outsourcing and FDI. We show how the optimal income tax …