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We develop a general method to study the effects of non-linear taxation in dynamic settings using variational arguments. We first derive general theoretical formulas that characterize the welfare effects of local tax reforms and, in particular, the optimal tax system, potentially restricted...
Persistent link: https://www.econbiz.de/10012457886
individuals' moral intuitions. The essay then explores an alternative normative framework, dubbed the Just Deserts Theory …
Persistent link: https://www.econbiz.de/10012462806
We use a model of automation to show that with the current U.S. tax system, a fall in automation costs could lead to a massive rise in income inequality. This inequality can be reduced by raising marginal income tax rates and taxing robots. But this solution involves a substantial efficiency...
Persistent link: https://www.econbiz.de/10012453905
The purpose of the present note is to explore the structure of optimal income taxation/redistribution in an economy …, of course, an additional incentive for income redistribution from wealthy to poor citizens is created and the logical …
Persistent link: https://www.econbiz.de/10012478985
Should a nation's tax system become more progressive as it opens to trade? Does opening to trade change the benefits of a progressive tax system? We answer these question within a standard incomplete markets model with frictional labor markets and Ricardian trade. Consistent with empirical...
Persistent link: https://www.econbiz.de/10012452938
While prior literature has identified various effects of environmental policy, this note uses the example of a proposed carbon permit system to illustrate and discuss six different types of distributional effects: (1) higher prices of carbon-intensive products, (2) changes in relative returns to...
Persistent link: https://www.econbiz.de/10012461954
This paper summarizes important developments in tax incidence analysis over the past forty years. We mark the date of the beginning of modern tax incidence analysis with the publication of Harberger (1962) and discuss the relation of subsequent work to this seminal paper
Persistent link: https://www.econbiz.de/10012469736
This paper investigates the long-run incidence of the corporate income tax in an open-economy model calibrated with two economies: the United States and a larger mirror economy representing the rest of the world. Imperfect substitutability of domestic and foreign products plays a key role in...
Persistent link: https://www.econbiz.de/10012470444
redistribution due to tainted gains? Or perhaps less because of an additional wedge that distorts labor effort? Do concerns about …
Persistent link: https://www.econbiz.de/10012479531
redistribution can increase the optimal sin tax, if lower-income consumers are more responsive to taxes or are more biased. As an …
Persistent link: https://www.econbiz.de/10012479790