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I consider the case for the minimum wage alongside (optimal) income taxes when workers differ in both wages and working hours, such that a given level of income corresponds to multiple wage rates. The minimum wage is directly targeted at the lowest-wage workers, while income taxes are at most...
Persistent link: https://www.econbiz.de/10014390442
We argue that promoting education may be a means to reduceincome inequality. When workers of different skill levels ….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
This paper analyses optimal corrective taxation and optimal income redistribution. Under general utility functions, the …
Persistent link: https://www.econbiz.de/10011699479
The Netherlands has a unique tradition in which all major Dutch political parties provide CPB Netherlands Bureau for Economic Policy Analysis with highly detailed proposals for the tax-benefit system in every national election. This information allows us to quantitatively measure the...
Persistent link: https://www.econbiz.de/10011456742
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
We study optimal linear income taxation in a model with heterogeneous agents where earnings potentials are endogenously determined through human capital accumulation. Agents differ in initial conditions and ability to learn. Capital market imperfections prevent poor agents to invest optimally in...
Persistent link: https://www.econbiz.de/10011326966
We analyze the optimal nonlinear income tax schedule when taxpayers earn multiple incomes and differ along many unobserved dimensions. We derive the necessary conditions for the government's optimum using both a tax perturbation and a mechanism design approach, and show that both methods produce...
Persistent link: https://www.econbiz.de/10012817145
capital income inequality. I illustrate these findings for the US economy …
Persistent link: https://www.econbiz.de/10012545131
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
Meritocratic fairness justifies inequality when it stems from performance. Yet performance is influenced by one …'s genetics. I investigate whether individuals' redistribution preferences are affected by their beliefs about genetics' role in … generating performance inequality. In an incentivized online experiment, impartial spectators can redistribute the earnings that …
Persistent link: https://www.econbiz.de/10014496483