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Optimal income tax in the presence of status effects
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UNSPECIFIED (2001) Optimal income tax in the presence of status effects. JOURNAL OF PUBLIC ECONOMICS, 81 (2). pp. 193-212.
Research output not available from this repository, contact author.Abstract
The existence of distortions from individuals competing to attain social status by using consumption signals justifies some measure of income tax as a counter-acting distortion. The question posed here is whether it also constitutes a reason for a more progressive income tax schedule. The answer is found to be broadly negative if progressiveness is interpreted as a more convex tax schedule, unless the rich are more concerned with status-seeking than the poor. On the other hand, status-seeking makes the optimal tax schedule steeper so that redistribution is increased. Essentially, the analysis of status-seeking based on a signaling approach confirms and strengthens the existing view of an optimal tax schedule, and can be incorporated into the Diamond [American Economic Review 88 (1998) 83-95] approach. (C) 2001 Elsevier Science B.V. All rights reserved.
| Item Type: | Journal Article | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
| Journal or Publication Title: | JOURNAL OF PUBLIC ECONOMICS | ||||
| Publisher: | ELSEVIER SCIENCE SA | ||||
| ISSN: | 0047-2727 | ||||
| Official Date: | August 2001 | ||||
| Dates: |
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| Volume: | 81 | ||||
| Number: | 2 | ||||
| Number of Pages: | 20 | ||||
| Page Range: | pp. 193-212 | ||||
| Publication Status: | Published |
Data sourced from Thomson Reuters' Web of Knowledge
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