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Lower tax for minimum wage earners
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dc.contributor.author | FitzRoy, Felix | |
dc.contributor.author | Jin, Jim | |
dc.date.accessioned | 2017-02-24T11:30:09Z | |
dc.date.available | 2017-02-24T11:30:09Z | |
dc.date.issued | 2017-02 | |
dc.identifier.citation | FitzRoy , F & Jin , J 2017 ' Lower tax for minimum wage earners ' School of Economics and Finance Discussion Paper , no. 1703 , University of St Andrews , St Andrews . | en |
dc.identifier.issn | 0962-4031 | |
dc.identifier.other | PURE: 249184392 | |
dc.identifier.other | PURE UUID: 1a290bb2-6beb-4582-9cbf-5d6135cfc29d | |
dc.identifier.uri | https://hdl.handle.net/10023/10362 | |
dc.description.abstract | We show that minimum wage earners should pay a lower tax than high earners. Though intuitive, this idea is not supported by the existing literature. The optimal maximin tax curve and two-band taxes are usually decreasing. Since decreasing marginal taxes would be unpopular, by continuity a flat tax seems to be superior to increasing marginal taxes and should be a second best solution. However, using a simple utility function and a general income distribution, we find that lowering the marginal tax for minimum wage earners not only dominates the optimal flat tax under maximin, but also make everyone better off. | |
dc.format.extent | 16 | |
dc.language.iso | eng | |
dc.publisher | University of St Andrews | |
dc.relation.ispartofseries | School of Economics and Finance Discussion Paper | en |
dc.rights | Copyright (c) 2017, the authors | en |
dc.subject | Flat tax | en |
dc.subject | Income redistribution | en |
dc.subject | Maximin | en |
dc.subject | Pareto improvement | en |
dc.subject | HB Economic Theory | en |
dc.subject | HG Finance | en |
dc.subject | HF5601 Accounting | en |
dc.subject | SDG 8 - Decent Work and Economic Growth | en |
dc.subject.lcc | HB | en |
dc.subject.lcc | HG | en |
dc.subject.lcc | HF5601 | en |
dc.title | Lower tax for minimum wage earners | en |
dc.type | Working or discussion paper | en |
dc.description.version | Publisher PDF | en |
dc.contributor.institution | University of St Andrews. School of Economics and Finance | en |
dc.identifier.url | https://ideas.repec.org/p/san/wpecon/1703.html | en |
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