There is clear evidence that fairness plays a role in redistribution. Individuals want to compensate others for their misfortune, while they allow them to enjoy the fruits of their effort. Such fairness considerations have been introduced in political economy and optimal income tax models with a...

In most developed countries, economies are facing population ageing, falling fertility rates and stagnating labour force participation. The ability of governments to fund future pension and health-care expenditure relies to a large extent on income tax and social security receipts from workers....