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Organization of Knowledge and Taxation

Author

Listed:
  • Marek Kapicka

    (UCSB)

  • Ctirad Slavik

    (CERGE-EI)

Abstract

This paper studies how income taxation interacts with the organization of knowledge and production, and ultimately the distribution of wages in the economy. A more progressive tax system reduces the time that managers allocate to work. This makes the organization of production less efficient and reduces wages at both tails of the distribution, which increases lower tail wage inequality and decreases upper tail wage inequality. The optimal tax system is significantly less progressive than the current one in the United States, because a less progressive tax system also generates a less unequal wage distribution.

Suggested Citation

  • Marek Kapicka & Ctirad Slavik, 2019. "Organization of Knowledge and Taxation," 2019 Meeting Papers 699, Society for Economic Dynamics.
    • Handle: RePEc:red:sed019:699
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    Cited by:

    1. Florian Scheuer & Joel Slemrod, 2020. "Taxation and the Superrich," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 189-211, August.

    More about this item

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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