this decision into account. It is shown that the employment effects of a linear income tax are not altered qualitatively by …

This handbook chapter reviews recent developments in the theory of optimal labor income taxation. We emphasize … connections between theory and empirical work that were initially lacking from optimal income tax theory. First, we provide … historical and international background on labor income taxation and means-tested transfers. Second, we present the simple model …

, payroll, and consumption-taxes that generate significant disincentives for employment. In Taxes, Transfers, and Labor Supply …

This paper characterizes the optimal redistributive taxation when individuals are heterogeneous in two exogenous …-off. -- Non-linear taxation ; redistribution ; adverse selection ; random participation ; unemployment ; labor market frictions …