We analyze optimal taxation of labor and capital income in a life-cycle framework with idiosyncratic income risk. We provide a novel decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is independent of the social welfare function and...

We analyze optimal taxation of labor and capital income in a life-cycle framework with idiosyncratic income risk. We provide a novel decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is independent of the social welfare function and...

In a broader sense the welfare state ex ante can be seen as a social insurance for life-time risks, and ex post as a redistribution mechanism of incomes. Sinn (1995) has developed a normative theory of the welfare state in this view. On a constitutional plain agents determine the amount of...

Social disparities have a common and consistent character in the vast majority of contemporary countries. The level of income inequality in OECD countries has grown in the past 30 years and is still rising. Taxes and tax systems, aside from social transfers, are fiscal instruments widely used in...

The author reviews recent studies of how social status concerns influence individual preferences for redistribution and impact the design of optimal tax policies. He focuses on two aspects: the relevant dimension over which relative concerns are defined and the different formalizations of the...

The author reviews recent studies that investigate how social status concerns influence individual preferences for redistribution and impact the design of optimal tax policies. He focuses on two aspects: the relevant dimension over which relative concerns are defined and the different...

Many OECD countries such as the USA, the UK or Switzerland are concerned with the affordability of utility services and the distributional consequences inherent in the pricing strategy of basic goods and services, such as electricity. However, the effectiveness of the electricity tariff as a...

We characterize optimal redistributive taxation when individuals are heterogeneous in their skills and their values of non-market activities. Search-matching frictions on the labor markets create unemployment. Wages, labor demand and participation are endogenous. Average tax rates are increasing...

In this paper we want to provide an utopian attempt to tackle inequality and to tackle, most specifically, what we consider the cultural and ethical origin of inequality: paid work. We believe that a globalised world, structured around the asymmetry between an increasingly small number of...

This paper studies the design of sin taxes when firms exercise market power. We outline an optimal tax framework that highlights how market power impacts the efficiency and redistributive properties of sin taxation, and quantify these effects in an application to sugar-sweetened beverage...