Heterogeneity in Needs and Negative Marginal Tax Rates

Spencer Bastani, Sören Blomquist and Luca Micheletto

No 6708, CESifo Working Paper Series from CESifo

Abstract: This paper highlights the possibility that negative marginal tax rates arise in an intensive-margin optimal income tax model where wages are exogenous and preferences are homogeneous, but where agents differ both in skills (labor market productivity) and their needs for a work-related consumption good.

Keywords: nonlinear income taxation; negative marginal tax rates; heterogeneity in needs; redistribution (search for similar items in EconPapers)
JEL-codes: H21 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6708

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