Arbeitspapier
Nonlinear Taxation of Income and Education in the Presence of Income-Misreporting
We study the joint design of nonlinear income and education taxes when the government pursues redistributive objectives. A key feature of our setup is that the ability type of an agent can affect both the costs and benefits of acquiring education. Market remuneration of agents depends on both their innate ability type and their educational choices. Our focus is on the properties of constrained efficient allocations when educational choices are publicly observable at the individual level, but earned income is subject to misreporting. We find that income-misreporting (IM) affects the optimal distortions on income and education and shed light on the reasons for it and mechanisms through which it is done. We show how and why IM strengthens the case for downward distorting the educational choices of low-ability agents. Finally, we find that IM provides another mechanism that makes commodity taxation useful.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 9987
- Classification
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Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Tax Evasion and Avoidance
Wage Level and Structure; Wage Differentials
- Subject
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optimal taxation
education
human capital
income-misreporting
redistribution
- Event
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Geistige Schöpfung
- (who)
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Bastani, Spencer
Gahvari, Firouz
Micheletto, Luca
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2022
- Handle
- Last update
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10.03.2025, 11:44 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
- Bastani, Spencer
- Gahvari, Firouz
- Micheletto, Luca
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2022
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Optimal factor income taxation in the presence of unemployment
Corrective Taxation of a Consumption Externality in the Presence of an Optimal Non-linear Income Tax
Optimal linear commodity taxation under optimal non-linear income taxation
Optimal Non-Linear Income Taxation in Search Equilibrium
Unemployment Benefits and Optimal Non-Linear Income Taxation
Intergenerational Income Mobility and Income Taxation
Capital Income Taxation of Asymmetric Countries
A positive theory of income taxation
Optimal Non-Linear Income Taxation for the Alleviation of Income Poverty
Optimal Commodity Taxation Under Non-linear Income Taxation
Optimal Nonlinear Income Taxation for Reduction of Envy
Optimal Factor Income Taxation in the Presence of Unemployment
Optimal factor income taxation in the presence of unemployment
Corrective Taxation of a Consumption Externality in the Presence of an Optimal Non-linear Income Tax
Optimal linear commodity taxation under optimal non-linear income taxation
Optimal Non-Linear Income Taxation in Search Equilibrium
Unemployment Benefits and Optimal Non-Linear Income Taxation
Intergenerational Income Mobility and Income Taxation
Capital Income Taxation of Asymmetric Countries