-seeking preferences justify heavier taxation of income because this serves to internalise the negative externality that the pursuit of … status imposes on others. In a model where status depends on both income and effort, we show that the optimal corrective tax … for. Additionally, we demonstrate how the elasticity of labour supply depends on the parameters of the status production …

should be designed to minimize the second elasticity (avoidance) through tax enforcement and tax neutrality across income …, implyingthat the overall elasticity is large. But top income share increases have not translated into higher economic growth … responses. The first elasticity (supply side) is the sole real factor limiting optimal top tax rates. The optimal tax system …