Outsourcing and Optimal Nonlinear Taxation: A Note
Thomas Aronsson and
Erkki Koskela
No 2269, CESifo Working Paper Series from CESifo
Abstract:
This paper addresses outsourcing in the two-type optimal income tax model. If the government is able to control outsourcing via a direct tax instrument, outsourcing will not affect the marginal income tax structure. In the absence of a direct tax instrument, and under the plausible assumption that higher outsourcing increases the wage differential, the government will implement a lower marginal income tax rate for the low-ability type and a higher marginal income tax rate for the high-ability type than it would otherwise have done.
Keywords: outsourcing; optimal nonlinear taxation (search for similar items in EconPapers)
JEL-codes: H21 H25 J31 J62 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (2)
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Journal Article: Outsourcing and optimal nonlinear taxation: A note (2009) 
Working Paper: Outsourcing and Optimal Nonlinear Taxation: A Note (2008) 
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2269
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