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Optimal Taxation under Regional Inequality
We study how regional productivity di¤erences and labor mobility shape optimal Mirrleesian tax-transfer schemes. When tax schedules are not al- lowed to differ across regions, productivity-enhancing inter-regional migra- tion exerts a downward pressure on optimal marginal tax rates. When regiona...
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| Gepubliceerd in: | MAGKS - Joint Discussion Paper Series in Economics (Band 13-2020) |
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| Hoofdauteurs: | , , |
| Formaat: | Artikel |
| Taal: | Engels |
| Gepubliceerd in: |
Philipps-Universität Marburg
2020
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| Onderwerpen: | |
| Online toegang: | PDF Full text |
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| Samenvatting: | We study how regional productivity di¤erences and labor mobility shape
optimal Mirrleesian tax-transfer schemes. When tax schedules are not al-
lowed to differ across regions, productivity-enhancing inter-regional migra-
tion exerts a downward pressure on optimal marginal tax rates. When
regionally di¤erentiated taxation is allowed, marginal tax rates in high-
(low-)productivity regions should be corrected downwards (upwards) rela-
tive to the benchmark without migration. Simulations of the productivity
di¤erences between metropolitan and other areas of the US indicate that
migration affects the optimal tax-transfer schedule more strongly in the
regionally differentiated rather than in the undi¤erentiated case. |
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| Fysieke beschrijving: | 42 Seiten |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0640 |