Arbeitspapier
Optimal Taxation with Multiple Incomes and Types
We analyze the optimal nonlinear income tax schedule when taxpayers earn multiple incomes and differ along many unobserved dimensions. We derive the necessary conditions for the government's optimum using both a tax perturbation and a mechanism design approach, and show that both methods produce the same results. Our main contribution is to propose a numerical method to find the optimal tax schedule. Applied to the optimal taxation of couples, we find that optimal isotax curves are very close to linear and parallel. The slope of isotax curves is strongly affected by the relative tax-elasticity of male and female income. We make several additional contributions, including a test for Pareto efficiency and a condition on primitives that ensures the government's necessary conditions are sufficient and the solution to the problem is unique.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 9534
- Klassifikation
-
Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Asymmetric and Private Information; Mechanism Design
- Thema
-
nonlinear optimal taxation
multidimensional screening
household income taxation
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Spiritus, Kevin
Lehmann, Etienne
Renes, Sander
Zoutman, Floris
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2022
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:46 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Spiritus, Kevin
- Lehmann, Etienne
- Renes, Sander
- Zoutman, Floris
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2022
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