Tax me if you can! Optimal Nonlinear Income Tax Between Competing Governments

Etienne Lehmann (), Laurent Simula and Alain Trannoy

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Abstract: We investigate how potential tax-driven migrations modify the Mirrlees income tax schedule when two countries play Nash. The social objective is the maximin and preferences are quasi-linear in consumption. Individuals differ both in skills and migration costs, which are continuously distributed. We derive the optimal marginal income tax rates at the equilibrium, extending the Diamond-Saez formula. We show that the level and the slope of the semi-elasticity of migration (on which we lack empirical evidence) are crucial to derive the shape of optimal marginal income tax. JEL Codes: D82, H21, H87, F22.

Keywords: Economie; quantitative (search for similar items in EconPapers)
Date: 2014
Note: View the original document on HAL open archive server: https://amu.hal.science/hal-01474437v1
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Citations: View citations in EconPapers (106)

Published in Quarterly Journal of Economics, 2014, 129 (4), pp.1995--2030. ⟨10.1093/qje/qju027⟩

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Journal Article: Tax me if you can! Optimal Nonlinear Income Tax Between Competing Governments (2014)
Working Paper: Tax Me if You Can! Optimal Nonlinear Income Tax between Competing Governments (2014)
Working Paper: Tax Me If You Can! Optimal Nonlinear Income Tax between Competing Governments (2013)
Working Paper: Tax Me If You Can! Optimal Nonlinear Income Tax Between Competing Governments (2013)
Working Paper: Tax Me If You Can! Optimal Nonlinear Income Tax between Competing Governments (2013)
Working Paper: Tax Me If You Can! Optimal Nonlinear Income Tax between Competing Governments (2013)
Working Paper: Tax Me If You Can!Optimal Nonlinear Income Tax Between Competing Governments (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01474437

DOI: 10.1093/qje/qju027

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