This Handbook entry presents a conceptual, normative overview of the subject of taxation. It emphasizes the … relationships among the main functions of taxation—notably, raising revenue, redistributing income, and correcting externalities …—and the mapping between these functions and various forms of taxation. Different types of taxation as well as expenditures on …

What shapes the optimal degree of progressivity of the tax and transfer system? On the one hand, a progressive tax … earnings risk. At the same time, progressivity reduces incentives to work and to invest in skills, and aggravates the …, and market structure parameters influence the optimal degree of progressivity. A calibration for the U.S. economy …

Local and state governments attempt to lessen after-tax income inequality via progressive taxation. Migration responses … redistributive effects from taxation are fully capitalized into gross wages leaving after-tax wages unchanged. Empirical evidence has …