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This paper analyzes optimal progressive capital income taxation in an infinite horizon model where individuals differ only through their initial wealth. We consider progressive capital income tax schedules taking a simple two-bracket form with an exemption bracket at the bottom and a single...
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This paper provides a theoretical analysis of optimal minimum wage policy in a perfectly competitive labor market and obtains two key results. First, we show that a binding minimum wage – while leading to unemployment – is nevertheless desirable if the government values redistribution toward...
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