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We develop models of optimal linear and non-linear income taxation with endogenous human capital formation to explore optimal education subsidies. Optimal subsidies on education ensure efficiency in human capital accumulation and thus play an important role in alleviating the tax distortions on...
Persistent link: https://www.econbiz.de/10011343324
Progressive income taxes moderate wage demands by trade unions and thereby reduce unemployment, but alsothey reduce incentives to acquire skills and lower productivity of workers. The optimal response of the governmentto this dilemma is to choose a system of progressive taxes and to (partly)...
Persistent link: https://www.econbiz.de/10011313934
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Gender differences in voting patterns and political attitudes towards redistribution are well-documented. The … experiments on preferences for redistribution conducted in the U.S. and several European countries to disentangle these potential …
Persistent link: https://www.econbiz.de/10011523572
This paper studies the design of tax systems that implement a planner's second-best allocation in a market economy. An example shows that the widely used Mirrleesian (1976) tax system cannot implement all incentive-compatible allocations. Hammond's (1979) "principle of taxation" proves that any...
Persistent link: https://www.econbiz.de/10010403177
IPCC (2022) documents a looming gap between climate goals and implemented policies and points to a lack of political commitment. We study policymakers' incentives to commit. A policymaker decides on a policy to encourage citizens to make investments and determines the degree of flexibility to...
Persistent link: https://www.econbiz.de/10014369623
A flat tax rate on income has gained popularity in European countries. This paper assesses the attractiveness of such a flat tax in achieving redistributive objectives with the least cost to labour market performance. We do so by using a detailed applied general equilibrium model for the...
Persistent link: https://www.econbiz.de/10011372518
.Hence, a given compression of after-tax incomes can be achievedat lower marginal tax rates. Optimal redistribution policy faces …
Persistent link: https://www.econbiz.de/10011333262
Should education be subsidized for the purpose of redistribution? The usual argument against subsidies to education … the absence of a strive for redistribution, the market generates the efficient level of investment in human capital. When … there is a demand for redistribution, the general equilibrium effects on relative wages might make a subsidy to education an …
Persistent link: https://www.econbiz.de/10011317437
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