The usual method of solving for an optimal nonlinear tax schedule is that of the primal approach -- first solving for the optimal allocation, and subsequently determining which tax system decentralizes this allocation. While this method is mathematically rigorous, it lacks intuitive appeal. I...

We find evidence that individuals' subjective well-being depends on the macroeconomic performance of other countries as well as that of their home country. Given the home country's economic growth, an individual's life satisfaction is positively associated with the economic growth of important...

I derive the optimal nonlinear income tax when individuals do not necessarily maximize their own well-being. This generates a corrective argument for taxation: optimal marginal taxes are higher (lower) if individuals work too much (too little) from a well-being point of view. I allow for...

The social welfare implications of income tax policy are shown to critically depend on whether or not labor markets are rationed — i.e., on the existence of involuntary unemployment. With rationed labor markets, raising taxes on the employed and transfers towards the unemployed might improve...