Revisiting Tax on Top Income
Ayse Imrohoroglu (),
Cagri Kumru () and
ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics
In this paper, we study optimal income taxation in a model with entrepreneurial activity. We conduct two types of changes in tax policy: changing the overall progressivity of taxes versus changing the tax rate of the richest 1% of the population. We study the implications of these tax policies on welfare, inequality, and government revenues. Our results indicate that increasing the overall progressivity of taxes results in lower wealth inequality and higher welfare relative to increasing the tax rate on the richest 1% of the population.
Keywords: Entrepreneurship; taxation; progressivity; labor supply (search for similar items in EconPapers)
JEL-codes: D31 E21 H2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent, nep-mac, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2018-660
Access Statistics for this paper
More papers in ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().