Comparative Statics of Optimal Nonlinear Income Taxation in the Presence of a Publicly Provided Input

Craig Brett () and John Allan Weymark ()

No 910, Working Papers from Department of Economics, Vanderbilt University

Abstract: Comparative static properties of the solution to an optimal nonlinear income tax problem are provided for a model in which the government both designs a redistributive income tax schedule and provides a public input into a nonlinear production process. These assumptions imply that wage rates are endogenous. The endogeneity of the wages necessitates taking account of general equilibrium effects of changes in the parameters of the model that are not present when the technology is linear.

Keywords: Asymmetric information; comparative statics; optimal income taxation; publicly provided inputs (search for similar items in EconPapers)
JEL-codes: D82 H21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 2009-08

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Persistent link: http://EconPapers.repec.org/RePEc:van:wpaper:0910

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