Bunching and Rank-Dependent Optimal Income Taxation

Arbeitspapier

We consider optimal non-linear income tax problems when the social welfare function only depends on ranks as in Yaari (1987) and weights agree with the Lorenz quasi-ordering. Gini, S-Gini, and a class putting more emphasis on inequality in the upper part of the distribution belong to this set. Adopting a first-order approach, we establish marginal tax formula assuming a continuous population framework, and derive conditions on the primitives of the model for which the socially optimal allocation is either fully separating or involves some bunching. For all log-concave survival functions, bunching is precluded for the maximin, Gini, and ”illfare-ranked single-series Ginis”. We then turn to a discrete population setting, and provide ”ABC” formulas for optimal marginal tax rates, which are related to those for a continuum of types but remain essentially distinct.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 8443

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Asymmetric and Private Information; Mechanism Design ; Taxation and Subsidies: Efficiency; Optimal Taxation
• Thema: rank dependence ; Gini ; optimal income taxation ; bunching ; log-concavity

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Simula, Laurent ; Trannoy, Alain
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and Ifo Institute (CESifo)
• (wo): Munich
• (wann): 2020

Weitere Informationen

• Handle: http://hdl.handle.net/10419/223515
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ