 Optimal Labour Income Taxation in Poland: The Case of High-Income EarnersMaciej Dudek, Paweł Dudek and Konrad Walczyk Gospodarka Narodowa. The Polish Journal of Economics, 2023, issue 1, 41-65 Abstract: In this paper, we use actual data provided by the Polish tax authority and characterise the properties of income distribution in Poland in the case of high-income earners. By employing a variety of techniques we are able to confirm that the distribution of income in Poland can be approximated with a Pareto distribution in its upper tail. This finding makes the formula for the optimal marginal tax rates of Saez [2001] applicable to the Polish case and allows us to provide estimates of the optimal marginal tax rates for Poland. We show that the current tax policy in Poland is not optimal. Specifically, we show, by relying on empirically viable estimates of the elasticity of the labour supply with respect to the wage, that the optimal marginal tax rate at high income levels exceeds 60%. In other words, we suggest that there is room for a welfare-improving reform in Poland, and we argue that high-income individuals should be expected to contribute substantially more at the margin than they currently do. Keywords: social welfare; economic efficiency; Pareto distribution; optimal taxation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sgh:gosnar:y:2023:i:1:p:41-65 Access Statistics for this article Gospodarka Narodowa. The Polish Journal of Economics is currently edited by Marek Gruszczyński, Grzegorz Konat More articles in Gospodarka Narodowa. The Polish Journal of Economics from Warsaw School of Economics Contact information at EDIRC. |
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