Optimum income taxation and layoff taxes

Pierre Cahuc and Andre Zylberberg ()

Journal of Public Economics, 2008, vol. 92, issue 10-11, 2003-2019

Abstract: This paper analyzes optimum income taxation in a model with endogenous job destruction that gives rise to unemployment. It is shown that optimal tax schemes comprise both payroll and layoff taxes when the state provides public unemployment insurance and aims at redistributing income. The optimal layoff tax is equal to the social cost of job destruction, which amounts to the sum of unemployment benefits (that the state pays to unemployed workers) and payroll taxes (that the state does not get when workers are unemployed).

Keywords: H21; H32; J38; J65; Layoff; taxes; Optimal; taxation; Job; destruction (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (20)

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Related works:
Working Paper: Optimum income taxation and layoff taxes (2008)
Working Paper: Optimum income taxation and layoff taxes (2008)
Working Paper: Optimum Income Taxation and Layoff Taxes (2005)
Working Paper: Optimum Income Taxation and Layoff Taxes (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:92:y:2008:i:10-11:p:2003-2019

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