Arbeitspapier
Tax Curvature
In a Mirrleesian environment, a monopsonist sets hourly wages and individuals choose how many hours to work. Labor market outcomes do not only depend on the level and slope of the income tax function, but also on its curvature. A more concave tax schedule raises the elasticity of labor supply, which boosts wages. Consequently, optimal marginal tax rates for low-skilled workers are declining in income. I derive an optimal tax formula in terms of sufficient statistics that accounts for the impact of tax curvature on labor market outcomes.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 9220
- Classification
-
Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Wages, Compensation, and Labor Costs: Public Policy
Monopsony; Segmented Labor Markets
- Subject
-
monopsony
optimal taxation
tax curvature
- Event
-
Geistige Schöpfung
- (who)
-
Hummel, Albert Jan
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
-
2021
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Hummel, Albert Jan
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2021
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Robust Mechanisms: the curvature case
Eliciting Utility Curvature in Time Preference
Level-Slope-Curvature - Fact or Artefact?
Imposing Curvature Restrictions on Flexible Functional Forms
Cartel Stability and the Curvature of Market Demand
Smoothing with curvature constraints based on boosting techniques
Magnitude Effects and Utility Curvature in Inter-temporal Choice
Imposing and testing curvature conditions on a Box-Cox function
Tax overpayments, tax evasion, and book-tax differences
Tax Competition with Two Tax Instruments - and Tax Evasion
Tax Progressivity and Tax Evasion
Tax curvature
Robust Mechanisms: the curvature case
Eliciting Utility Curvature in Time Preference
Level-Slope-Curvature - Fact or Artefact?
Imposing Curvature Restrictions on Flexible Functional Forms
Cartel Stability and the Curvature of Market Demand
Smoothing with curvature constraints based on boosting techniques
Magnitude Effects and Utility Curvature in Inter-temporal Choice
Imposing and testing curvature conditions on a Box-Cox function
Tax overpayments, tax evasion, and book-tax differences
Tax Competition with Two Tax Instruments - and Tax Evasion