We show that lack of commitment in the policymaking process may explain the prevalence of the minimum wage to redistribute income, despite its negative impact on unemployment. In the absence of commitment, firms anticipate the government's willingness to use a minimum wage policy to reduce the...

We investigate whether the optimal income tax model of Mirrlees (1971) can reproduce the empirically observed increasing average tax rates. We give a necessary condition and exhibit two examples where the optimal average tax rates are increasing.

We investigate whether the optimal income tax model of Mirrlees (1971) can reproduce the empirically observed increasing average tax rates. We give a necessary condition and exhibit two examples where the optimal average tax rates are increasing.