EconPapers    
Economics at your fingertips  
 

TAXES AND EMPLOYMENT SUBSIDIES IN OPTIMAL REDISTRIBUTION PROGRAMS

Paul Beaudry () and Charles Blackorby ()

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: This paper explores how to optimally set tax and transfers when taxation authorities : (1) are uninformed about individuals’ value of time in both market and non-market activities and (2) can observe both market-income and time allocated to market employment. In contrast to much of the optimal income taxation literature, we show that optimal redistribution in this environment involves distorting market employment upwards for low net-income individuals through phased-out wage-contingent employment subsidies, and distorting employment downward for high net-income individuals through positive and increasing marginal income tax rate. We also show that workfare may also be used as part of an optimal redistribution program.

Keywords: Taxation; Redistribution; Wage Subsidies Screening (search for similar items in EconPapers)
JEL-codes: D82 H21 H23 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp708.pdf

Related works:
Journal Article: Taxes and Employment Subsidies in Optimal Redistribution Programs (2009) Downloads
Working Paper: Taxes and Employment Subsidies in Optimal Redistribution Programs (2006) Downloads
Working Paper: Taxes and Employment Subsidies in Optimal Redistribution Programs (2006) Downloads
Working Paper: Taxes and Employment Subsidies in Optimal Redistribution Programs (2004) Downloads
Working Paper: Taxes and Employment Subsidies in Optimal Redistribution Programs (2004) Downloads
Working Paper: Taxes and Employment Subsidies in Optimal Redistribution Programs (1998) Downloads
Working Paper: Taxes and employment subsidies in an optimal redistribution program (1997) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:708

Access Statistics for this paper

More papers in The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Margaret Nash ().

 
Page updated 2019-08-22
Handle: RePEc:wrk:warwec:708