Arbeitspapier
Negative marginal tax rates and heterogeneity
Heterogeneity is likely to be an important determinant of the shape of optimal tax schemes. This article addresses the issue in a model à la Mirrlees with a continuum of agents. The agents differ in their productivities and opportunity costs of work, but their labor supplies depend only on a unidimensional combination of their two characteristics. Conditions are given under which the standard result that marginal tax rates are everywhere non-negative holds. This is in particular the case when work opportunity costs are distributed independently of productivities. But one can also get negative marginal tax rates: economies where negative tax rates are optimal at the bottom of the income distribution are studied, and a numerical illustration is given, based on UK data.
- Language
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Englisch
- Bibliographic citation
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Series: IFS Working Papers ; No. 09,12
- Classification
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Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Fiscal Policies and Behavior of Economic Agents: Household
- Subject
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optimal taxation
heterogeneity
welfare
Steuersystem
Negative Einkommensteuer
Arbeitsangebot
Arbeitsproduktivität
Opportunitätskosten
Wohlfahrtseffekt
Theorie
Großbritannien
- Event
-
Geistige Schöpfung
- (who)
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Choné, Philippe
Laroque, Guy
- Event
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Veröffentlichung
- (who)
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Institute for Fiscal Studies (IFS)
- (where)
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London
- (when)
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2009
- Handle
- Last update
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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
- Choné, Philippe
- Laroque, Guy
- Institute for Fiscal Studies (IFS)
Time of origin
- 2009
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