On Income Distribution, Incentive Effects and Optimal Income Taxation

Sadka, Efraim

doi:10.2307/2297322

Cited by 190 publications

(90 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…This is the classical zero top rate result derived by Sadka (1976) and Seade (1977). The intuition for the result is straightforward.…”

Section: Figuresupporting

confidence: 66%

“…Seade (1982) clarified the conditions under which this result holds. The most striking and well known result is that the marginal tax rate should be zero at the income level of the top income level when the income distribution is bounded (Sadka (1976) and Seade (1977)). Numerical simulations have shown, however, that this result is very local (see Tuomala (1990)).…”

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Using Elasticities to Derive Optimal Income Tax Rates

Saez

2001

The Review of Economic Studies

796

724

View full text Add to dashboard Cite

This paper derives optimal income tax formulas using compensated and uncompensated elasticities of earnings with respect to tax rates. A simple formula for the high income optimal tax rate is obtained as a function of these elasticities and the thickness of the top tail of the income distribution. In the general non-linear income tax problem, this method using elasticities shows precisely how the different economic effects come into play and which are the key relevant parameters in the optimal income tax formulas of Mirrlees. The optimal non-linear tax rate formulas are expressed in terms of elasticities and the shape of the income distribution. These formulas are implemented numerically using empirical earning distributions and a range of realistic elasticity parameters.

show abstract

“…This is the classical zero top rate result derived by Sadka (1976) and Seade (1977). The intuition for the result is straightforward.…”

Section: Figuresupporting

confidence: 66%

Section: Literature Reviewmentioning

confidence: 99%

Using Elasticities to Derive Optimal Income Tax Rates

Saez

2001

The Review of Economic Studies

796

724

View full text Add to dashboard Cite

show abstract

“…In particular, in the case of perfect correlation between skill and height, affirmative action would achieve full equality (equal wage rate for all individuals in the economy). This goal could never be attained by the (height-blind) taxand-transfer system due to incentive compatibility constraints [see, e.g., Sadka (1976) and Stiglitz (1982)]. …”

Section: A Case For Affirmative Actionmentioning

confidence: 99%

Incorporating affirmative action into the welfare state

Blumkin

Margalioth

Sadka

2009

Journal of Public Economics

Self Cite

View full text Add to dashboard Cite

In this paper, we discuss a novel aspect of affirmative action policy. We examine its redistributive role, asking whether in an egalitarian society, supplementing the tax-transfer system with an affirmative action policy would enhance social welfare. We demonstrate that affirmative action could be a desirable policy tool even if racial discrimination does not exist in the labor market. JEL Classification: H2, D6

show abstract

“…Cii) For all except, at most, Gountably many n's, there is a unique solution to the household utility-maximization problem: max v(x,y) subject to x~ny -T(ny) (see Sadka, 1976).…”

Section: Y2mentioning

confidence: 99%

Equivalence scales, horizontal equity and optimal taxation under utilitarianism

Balcer

Sadka

1986

Journal of Public Economics

Self Cite

View full text Add to dashboard Cite

Families of various sizes a~l share the same preference maps over consumption and leisure where consumption has been appropriately scaled to reflect those variations'. Under lump sum taxes, equating labor supplies and scaled consumptions is not the~ptimal way to achieve horizontal equity. Under an income tax structure, if there is sufficient diversity of ahility for all family sizes, the opposite is true.In particular, the marginal tax rates of the two ends of the ability scales are positive for small families and negative for large ones.

show abstract

On Income Distribution, Incentive Effects and Optimal Income Taxation

Cited by 190 publications

References 4 publications

Using Elasticities to Derive Optimal Income Tax Rates

Using Elasticities to Derive Optimal Income Tax Rates

Incorporating affirmative action into the welfare state

Equivalence scales, horizontal equity and optimal taxation under utilitarianism

Contact Info

Product

Resources

About