Well - Being , Poverty and Labor Income Taxation : Theory and Application to Europe and the U . S . ⇤
نویسندگان
چکیده
In a model in which agents di↵er in wages and preferences over labor time–consumption bundles, we study labor income tax schemes that alleviate poverty. To avoid conflict with individual well-being, we require redistribution to take place between agents on both sides of the poverty line provided they have the same labor time. This requirement is combined with e ciency and robustness properties. Maximizing the resulting social preferences under incentive compatibility constraints yields the following evaluation criterion: tax schemes should minimize the labor time required to reach the poverty line. We apply this criterion to European countries and the US. JEL Classification: D63, H21, I32.
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