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When Redistribution Leads to Regressive Taxation

Author

Listed:
  • Cyril Hariton

    (Toulouse Business School)

  • Gwen�el Piaser

    (Department of Economics, University Of Venice Ca� Foscari)

  • Gwena�l Piaser

Abstract

We introduce labor contracts, in a framework of optimal redistribution: firms have some local market power and try to discriminate among heterogeneous workers. In this setting we show that if the firms have perfect information, i.e, they perfectly discriminate against workers and take all the surplus, the best tax function is flat. If the firms have imperfect information, i.e, if they offert incentive contracts, then (under some assumptions) the best redistributive taxation is regressive.

Suggested Citation

  • Cyril Hariton & Gwen�el Piaser & Gwena�l Piaser, 2006. "When Redistribution Leads to Regressive Taxation," Working Papers 2006_30, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2006_30
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    Cited by:

    1. Eren Gürer, 2022. "Rising markups and optimal redistributive taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1227-1259, October.
    2. Albert Jan Hummel, 2021. "Monopsony power, income taxation and welfare," Tinbergen Institute Discussion Papers 21-051/VI, Tinbergen Institute.
    3. Mathias, HUNGERBUEHLER, 2004. "The impact of Union Power on the Optimal Income Tax Schedule," LIDAM Discussion Papers IRES 2004034, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Albert Jan Hummel, 2021. "Tax Curvature," CESifo Working Paper Series 9220, CESifo.
    5. Граборов С.В., 2019. "Мажоритарная Оптимизация Налогообложения Доходов И Имущества Граждан," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 55(4), pages 28-42, октябрь.
    6. Albert Jan Hummel, 2021. "Monopsony Power, Income Taxation and Welfare," CESifo Working Paper Series 9128, CESifo.
    7. Hummel, Albert Jan, 2023. "Tax curvature," Journal of Public Economics, Elsevier, vol. 224(C).

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    More about this item

    Keywords

    Income Taxation; Redistribution; Labor market; Multi-principals; Adverse selection; Mechanism design;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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