Abstract
In this paper we demonstrate that supplementing the optimal non-linear income tax system with a binding maximum wage rule attains a Pareto improvement, by serving to mitigate the mimicking incentives of the high-skill individuals without entailing distortions.
Original language | English |
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Pages (from-to) | 374-378 |
Number of pages | 5 |
Journal | Economics Letters |
Volume | 120 |
Issue number | 3 |
DOIs | |
State | Published - 1 Sep 2013 |
Keywords
- Maximum wage
- Optimal income tax
- Redistribution
ASJC Scopus subject areas
- Finance
- Economics and Econometrics