Lundholm, Michael - Nationalekonomiska institutionen, Stockholms Universitet - 1999
Using Varian´s social insurance framework with a piecewise linear two bracket income tax, where t_1 is the tax rate in the lower bracket and t_1+t_2 is the tax rate in the upper bracket, Strawcynski (1998) claims that optimal requires t_1^*t_2^*=1. This note provides three comments: First, it...
