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Higher Tax for Top Earners.
- Source :
- Journal of Economics; Oct2017, Vol. 122 Issue 2, p121-136, 16p
- Publication Year :
- 2017
-
Abstract
- The literature can justify both increasing and decreasing marginal taxes (IMT & DMT) on top incomes under different welfare objectives and income distributions. Even when DMT are theoretically optimal, they are often politically infeasible. Then a flat tax seems to be a constrained optimal solution. We show however that, given any flat tax we can increase the total utility of a poor majority by raising the top income tax rate under a simple condition, which can be checked with empirical data. We further generalize our main results allowing different welfare weights, declining elasticity of labor supply and more tax bands. [ABSTRACT FROM AUTHOR]
- Subjects :
- INCOME redistribution
FLAT-rate income tax
LABOR supply
CAPITAL gains tax
WAGES
Subjects
Details
- Language :
- English
- ISSN :
- 09318658
- Volume :
- 122
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Journal of Economics
- Publication Type :
- Academic Journal
- Accession number :
- 125327137
- Full Text :
- https://doi.org/10.1007/s00712-017-0557-1