Arbeitspapier
Progressive Taxation in a Tournament Economy
Not enough is known about the responsiveness of individuals, in particular those who tend to work under different incentives, to changes in marginal tax rates. We ask whether changes in marginal tax rates are less distortionary for workers engaged in a contest. To examine this potential rationale for a more progressive tax code, we first model the effort decisions of workers faced with progressive taxation under tournaments and piece rates. Because of the difficulty identifying any distortion that may be induced by the tax code in naturally occurring data, we then report on the results of a real-effort experiment based on this model. Consistent with a behavioral approach to public finance, we find that tournament workers are less sensitive, and conclude with a tentative evaluation of the welfare benefits of progressive taxation in tournament economies.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 8369
- Classification
-
Wirtschaft
Taxation, Subsidies, and Revenue: General
Public Goods
Time Allocation and Labor Supply
Compensation Packages; Payment Methods
Design of Experiments: Laboratory, Individual
- Subject
-
taxation
tournaments
public good
real effort experiment
- Event
-
Geistige Schöpfung
- (who)
-
Carpenter, Jeffrey P.
Matthews, Peter Hans
Tabb, Benjamin
- Event
-
Veröffentlichung
- (who)
-
Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Carpenter, Jeffrey P.
- Matthews, Peter Hans
- Tabb, Benjamin
- Institute for the Study of Labor (IZA)
Time of origin
- 2014
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