Introduction -- Federal income taxes : funding the welfare state -- Cigarettes : creating crime through taxes -- The minimum wage : promoting teenage unemployment -- The fruits of alcohol prohibition : poison booze, crime, and corruption -- Be careful what you wish for

We analyze the macroeconomic implications of increasing the top marginal income tax rate using a dynamic general equilibrium framework with heterogeneous agents and a fiscal structure resembling the actual US tax system. The wealth and income distributions generated by our model replicate the...