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Help the Low Skilled or Let the Hardworking Thrive? A Study of Fairness in Optimal Income Taxation
Author(s) -
FLEURBAEY MARC,
MANIQUET FRANÇOIS
Publication year - 2007
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2007.00316.x
Subject(s) - redistribution (election) , economics , incentive , microeconomics , wage , redistribution of income and wealth , labour economics , public economics , public good , politics , political science , law
In a model where agents have unequal wages and heterogeneous preferences, we study the optimal redistribution via an income tax, when the social objective is based on a combination of efficiency and fairness principles, and when incentive issues are taken into account. We show how some fairness principles entail specific features for the optimal taxes, such as progressivity or tax exemption for incomes below the minimum wage.