Arbeitspapier

A simple theory of optimal redistributive taxation with equilibrium unemployment

We propose a canonical model of optimal nonlinear redistributive taxation with matching unemployment. In our model, agents are endowed with different skill levels and labor markets are perfectly segmented by skill. The government only observes negotiated wages. More progressive taxation leads to wage moderation that boosts labor demand. We design the optimal nonlinear redistributive tax schedule in the absence of welfare benefits and extensive labor supply margin. Compared to their efficient values, at the optimum gross wages and unemployment are lower. Average tax rates are moreover increasing in wages. The robustness of these properties is also discussed.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 4832

Klassifikation
Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Unemployment: Models, Duration, Incidence, and Job Search
Thema
Optimal income taxation
unemployment
matching
Einkommensteuer
Steuerprogression
Optimale Besteuerung
Arbeitslosigkeit
Arbeitsmarktsegmentierung
Qualifikation
Matching
Theorie

Ereignis
Geistige Schöpfung
(wer)
Hungerbühler, Mathias
Lehmann, Etienne
Parmentier, Alexis
van der Linden, Bruno
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2010

Handle
Letzte Aktualisierung
10.03.2025, 11:47 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Hungerbühler, Mathias
  • Lehmann, Etienne
  • Parmentier, Alexis
  • van der Linden, Bruno
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2010

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