Nonlinear Income Tax Reforms
This paper addresses questions of the following nature: under what conditions does a welfare-improving reform of a nonlinear income tax system necessitate a change in a particular agent's marginal tax rate or total tax burden? Our analysis is therefore a study in tax reform, rather than in optimal taxation. We consider a simple model with three types of agents (high-skill, middle-skill, and low-skill) who have preferences that are quasi-linear in labour. Under these assumptions and using our methodology, specific characteristics of the initial suboptimal tax system can be determined when all welfare-improving tax reforms require specified changes in a particular agent's tax treatment. Some other necessary features of the tax reform can also be determined. Thus, unlike many tax reform analyses in the literature, we are able to reach a number of clear-cut conclusions.
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- Sushama Murty & R. Robert Russell, 2005. "Externality Policy Reform: A General Equilibrium Analysis," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(1), pages 117-150, 02.
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"How Optimal Nonlinear Income Taxes Change When the Distribution of the Population Changes,"
Vanderbilt University Department of Economics Working Papers
1003, Vanderbilt University Department of Economics.
- Brett, Craig & Weymark, John A., 2011. "How optimal nonlinear income taxes change when the distribution of the population changes," Journal of Public Economics, Elsevier, vol. 95(11), pages 1239-1247.
- Jean-Yves Duclos & Paul Makdissi & Quentin Wodon, 2004.
"Socially-Improving Tax Reforms,"
Cahiers de recherche
- repec:ubc:bricol:98-09 is not listed on IDEAS
- repec:cup:cbooks:9780521497695 is not listed on IDEAS
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Social Choice and Welfare,
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- Brett, Craig, 1998. "Tax reform and collective family decision-making," Journal of Public Economics, Elsevier, vol. 70(3), pages 425-440, December.
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