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Union Strategy and Optimal Income Taxation

Author

Listed:
  • Kessing, Sebastian G.

    (University of Siegen)

  • Konrad, Kai A.

    (Max Planck Institute for Tax Law and Public Finance)

Abstract

Restrictions on work hours are more important in countries with a large welfare state. We show that this empirical observation is consistent with the strategic effects of such restrictions in a welfare state in the context of optimal direct taxation in the tradition of Mirrlees (1971). Our results also apply to non-welfarist states which have income redistribution, but not in purely extortionary states.

Suggested Citation

  • Kessing, Sebastian G. & Konrad, Kai A., 2005. "Union Strategy and Optimal Income Taxation," IZA Discussion Papers 1545, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp1545
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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