We study the optimal tax system when taxpayers earn different kinds of income by supplying different inputs. Imperfect … substitution between inputs allows for general equilibrium effects. We consider any type of cross-base responses to tax changes … such as income-shifting. Formalizing the tax schedule as the sum of many one-dimensional schedules, we express optimal …

This paper characterizes the optimal redistributive tax schedule in a matching unemployment framework with endogenous … (voluntary) nonparticipation and (involuntary) unemployment. The optimal employment tax rate is given by an inverse employment … responses. For plausible parameters, our matching environment induces much lower employment tax rates than the usual competitive …

-Mirrlees condition imposed. Employing a tax perturbation approach, we derive an optimal tax formula that generalizes previous results by … allowing for income effects and extensive margin responses. We provide a sufficient condition for optimal marginal tax rates to … using U.S. data. -- Optimal tax formula ; tax perturbation ; random participation …