A case for maximum wage

Tomer Blumkin, Efraim Sadka and Yotam Shem-Tov

Economics Letters, 2013, vol. 120, issue 3, 374-378

Abstract: In this paper we demonstrate that supplementing the optimal non-linear income tax system with a binding maximum wage rule attains a Pareto improvement, by serving to mitigate the mimicking incentives of the high-skill individuals without entailing distortions.

Keywords: Redistribution; Maximum wage; Optimal income tax (search for similar items in EconPapers)
JEL-codes: D6 H2 H5 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:3:p:374-378

DOI: 10.1016/j.econlet.2013.05.004

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