Arguably, for many citizens the perceived expected disutility from sanctions is smaller than the monetary gain from tax evasion. Nevertheless most people pay their taxes most of the time. In a lab experiment, we show that the willingness to pay taxes even absent enforcement is indeed pronounced....

Meritocracies aspire to reward hard work and promise not to judge individuals by the circumstances into which they were born. However, circumstances often shape the choice to work hard. I show that people's merit judgments are "shallow" and insensitive to this effect. They hold others...

Meritocracies aspire to reward effort and hard work but promise not to judge individuals by the circumstances they were born into. The choice to work hard is, however, often shaped by circumstances. This study investigates whether people's merit judgments are sensitive to this endogeneity of...

Much of the literature on flat tax reforms has highlighted the benefits of introducing flat personal income tax systems in transition economies. The advocated benefits of flat tax systems range from their simplicity, higher compliance and lower distortionary effects on growth and employment....

The growth of sharing economy marketplaces like Airbnb has generated discussions on their socioeconomic impact and lack of regulation. As a result, most major cities in the United States have started to charge an "occupancy tax'" (which is common for hotels) to Airbnb bookings. In this study, we...

This article studies socially optimal allocations, from the point of view of a benevolent social planner, in environments characterized by fixed resources, endogenous fertility, and full information. Individuals in our environment are fully rational and altruistic toward their descendants. Our...

We investigate Veblen effects on work hours, namely the way that a desire to emulate the consumption standards of the rich induces longer work hours among the rest. Consistent with our model of these asymmetric social comparisons, greater inequality predicts longer work hours in ten OECD...

Receiving equal wages for work of equal value is a legal right in many countries. However, it remains unknown to what degree the neglect of this principle yields differences in pay between social and other occupations. The results of a task-based analysis with survey data confirm a notable wage...

This paper investigates the distributional and efficiency consequences of an environmental tax reform, when the revenue from the green tax is recycled by varying labor tax rates. We build a general equilibrium model with imperfect heterogeneous labor markets, pollution consumption externalities,...

Optimal tax theory has diffculty rationalizing high marginal tax rates at the upper end of the income distribution. In this paper, I construct a model of optimal income taxation in which agents' preferences are interdependent. I derive a simple expression for optimal taxes that accommodates...