demand and wages. Compared to their efficient values, gross wages, unemployment and participation are lower. Average tax … rates are increasing. Marginal tax rates are positive, even at the top. Finally, numerical simulations suggest that … redistribution is much more important in our setting than in a comparable Mirrlees (1971) setting. …

This contribution describes the linkage of microsimulation models and computable general equilibrium (CGE) models using …, microsimulation models allow for detailed labor supply and distributional effects due to policy measures, as individual household data …

objective, if the elasticity of participation decreases along the distribution of skills, at the optimum, the average tax rate … is increasing, marginal tax rates are positive everywhere, while wages, unemployment rates and participation rates are … distorted downwards compared to their laissez-faire values. A simulation exercise confirms some of these properties under a …

participation are endogenous. Average tax rates are increasing at the optimum. This shifts wages below their laissez faire value and … distorts labor demand upwards. The marginal tax rate is positive at the top of the skill distribution even when the latter is …

-Mirrlees condition imposed. Employing a tax perturbation approach, we derive an optimal tax formula that generalizes previous results by … allowing for income effects and extensive margin responses. We provide a sufficient condition for optimal marginal tax rates to …

We derive a general optimal income tax formula when individuals respond along both the intensive and extensive margins … the Spence-Mirrlees condition being imposed. Employing a new tax perturbation approach that integrates the nonlinearity of … the tax function into the behavioral elasticities, we derive a fairly mild condition for optimal marginal tax rates to be …