Disagreements in Society over Linear vs. over Nonlinear Labour-Income Tax Schedules

Asen Ivanov
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Asen Ivanov: Queen Mary University of London, School of Economics and Finance

No 984, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: I investigate numerically the following question: Given that individuals with different wages disagree over the optimal labour-income tax schedule, how would such disagreements be affected if society restricted itself to using linear tax schedules? I find that there would be (i) a decrease in disagreements within a large segment of the population at the top of the wage distribution,(ii) a sharp decrease in how much a very-high-wage individual disagrees with individuals whose wage is weakly above the median but sufficiently far below her wage, (iii) a sharp decrease in how much a zero-wage individual disagrees with a median-wage individual, and (iv) a decrease in how much a zero-wage individual disagrees with high-wage individuals.

Keywords: labour-income tax; linear tax; redistribution; conflict (search for similar items in EconPapers)
JEL-codes: D70 D72 D74 H20 (search for similar items in EconPapers)
Date: 2024-10-31
New Economics Papers: this item is included in nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:984

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