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When Redistribution Leads to Regressive Taxation

Cyril Hariton (), Gwena�l Piaser Piaser () and Gwena�l Piaser
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Gwena�l Piaser Piaser: Department of Economics, University Of Venice Ca� Foscari

Authors registered in the RePEc Author Service: Gwenael Piaser ()

No 2006_30, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: We introduce labor contracts, in a framework of optimal redistribution: firms have some local market power and try to discriminate among heterogeneous workers. In this setting we show that if the firms have perfect information, i.e, they perfectly discriminate against workers and take all the surplus, the best tax function is flat. If the firms have imperfect information, i.e, if they offert incentive contracts, then (under some assumptions) the best redistributive taxation is regressive.

Keywords: Income Taxation; Redistribution; Labor market; Multi-principals; Adverse selection; Mechanism design (search for similar items in EconPapers)
JEL-codes: D21 D82 H21 L14 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2006
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Related works:
Journal Article: When Redistribution Leads to Regressive Taxation (2007) Downloads
Working Paper: When redistribution leads to regressive taxation (2004) Downloads
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