Calendrier du 20 avril 2020
Du 20/04/2020 de 17:30 à 18:30
PERI Giovanni(University of California, Davis)
PERI Giovanni(University of California, Davis)
PERI Giovanni(University of California, Davis)
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Régulation et Environnement
Du 20/04/2020 de 14:00 à 15:00
Zoom
STOSTAD Morten (PSE)
Inequality as an Externality: Consequences for Tax Design
This paper proposes to treat inequality as an economic externality.
Doing so allows us to introduce the societal effects of income inequality into simple welfarist models, wherein these effects are generally omitted. Novel policy implications are illustrated through an optimal income taxation model: resulting optimal income tax rates become unambiguously more progressive with a negative inequality externality, top optimal tax rates are shown to be particularly susceptible to the inequality externality, and optimal rates above the revenue-maximizing Laffer rate are observed. Our findings indicate that the magnitude of the inequality externality could be a significant factor in optimal policy design.