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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. ISSN 0047-2727
Full text not available from this repository.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 | ||||
| URI: | http://wrap.warwick.ac.uk/id/eprint/12006 |
Data sourced from Thomson Reuters' Web of Knowledge
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