Incentives, globalization, and redistribution
Antoine Ferey,
Andreas Haufler and
Carlo Perroni
Journal of Public Economics, 2023, vol. 224, issue C
Abstract:
We offer a new explanation for why taxes have become less redistributive in many countries while the concentration of incomes has increased. Our argument is based on the prevalence of incentive contracts in modern economies, in conjunction with increased product market integration. Globalization widens the spread of project returns and makes contract choices more responsive to tax changes. This can result in a lower optimal income tax rate while simultaneously increasing the income share of top earners. These results are confirmed in a calibrated version of our model based on U.S. income data.
Keywords: Performance contracts; Market integration; Redistributive taxation (search for similar items in EconPapers)
JEL-codes: D63 F15 H21 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272723001020
Full text for ScienceDirect subscribers only
Related works:
Working Paper: Incentives, Globalization, and Redistribution (2022) 
Working Paper: Incentives, Globalization, and Redistribution (2020) 
Working Paper: Incentives, Globalization, and Redistribution (2020) 
Working Paper: Incentives, Globalization, and Redistribution (2020) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:224:y:2023:i:c:s0047272723001020
DOI: 10.1016/j.jpubeco.2023.104920
Access Statistics for this article
Journal of Public Economics is currently edited by R. Boadway and J. Poterba
More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().