Optimal participation taxes

Arbeitspapier

Addressing extensive labour supply responses, the literature has established a case for larger transfers to the working poor than to even poorer non-working people. This paper casts new light on this result. I argue that the result hinges crucially on the labour supply responses of people in income brackets above that of the working poor. Then distinguishing between more and less poor working people, I show that if a single working type faces a negative tax, it is the poorer one. I extend the analysis by endogenising wages and show that key conditions will be of the same form as with exogenous wages.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3941

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Efficiency; Optimal Taxation
• Subject: Taxation ; Subsidies and Revenue ; Efficiency ; Optimal Taxation ; Arbeitsangebot ; Niedriglohn ; Niedrigeinkommen ; Optimale Besteuerung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vidar, Christiansen
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/65394
• Last update: 10.03.2025, 11:41 AM CET