Optimal Income Tax in the Presence of Status Effects

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dc.contributor.author Ireland, Norman en
dc.date.accessioned 2006-11-30T20:53:35Z en
dc.date.available 2006-11-30T20:53:35Z en
dc.date.issued 1998 en
dc.identifier.citation Department of Economics Working Paper Series 175 en
dc.identifier.uri http://hdl.handle.net/2292/184 en
dc.description.abstract The classical optimal income tax problem does not reveal many general properties except for the well-known tendency for marginal tax rates to reduce for high ability types, and in fact to become zero for the top type. The existence of distortions from individuals competing to attain social status by using consumption signals justifies some measure of income tax. 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 progressivity is interpreted as increasing marginal tax rates. On the other hand, status-seeking makes the optimal tax schedule steeper so that redistribution is increased. Broadly, the analysis of status-seeking based on a signalling approach confirms and strengthens the existing view of an optimal tax schedule. en
dc.format.extent application/pdf en
dc.format.mimetype text en
dc.language.iso en en
dc.publisher ResearchSpace@Auckland en
dc.relation.ispartofseries Department of Economics Working Paper Series (1997-2006) en
dc.rights Items in ResearchSpace are protected by copyright, with all rights reserved, unless otherwise indicated. Previously published items are made available in accordance with the copyright policy of the publisher. en
dc.rights.uri https://researchspace.auckland.ac.nz/docs/uoa-docs/rights.htm en
dc.subject.other Status en
dc.subject.other Economics en
dc.title Optimal Income Tax in the Presence of Status Effects en
dc.type Working Paper en
dc.rights.holder Copyright: the author en
dc.rights.accessrights http://purl.org/eprint/accessRights/OpenAccess en
pubs.org-id Economics en

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