| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5058427 | Economics Letters | 2015 | 5 Pages |
â¢Linear/piecewise-linear income tax finances categorical transfers to unable group.â¢Inequality in average marginal value of income across unable and able groups.â¢This inequality may persist at optimum: depends on unable group size/rev requirement.â¢Optimal tax expressions can be written more generally to allow for this.â¢Numerical results provide examples where this arises under both types of tax system.
When individuals differ in both productivity and some categorical attribute, optimal linear/piecewise-linear tax expressions are written to capture cases where it is suboptimal to eliminate inequality in the average social marginal value of income between categorical groups. Simulations provide examples.
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