Kroft, Kory; Kucko, Kavan; Lehmann, Etienne; Schmieder, … - 2016
We derive a sufficient statistics optimal tax formula in a general model that incorporates unemployment and endogenous … wages, to study the shape of the tax and transfer system at the bottom of the distribution. The sufficient statistics are … resembles a Negative Income Tax than an Earned Income Tax Credit relative to the case where unemployment and wage responses are …