Fair optimal tax with endogenous productivities

M. Fleurbaey, G. Valletta

Research output: Working paperProfessional

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Abstract

What is a good incentive-compatible policy when one wants to respect individual choices of labor and human capital but eliminate inequalities due to unequal access to human capital and different returns to human capital, and when earnings and human capital expenditures are the only verifiable variables? We propose a social ordering that incorporates this goal and we analyze the evaluation of tax reforms and the properties of optimal linear and non-linear taxes. For reform evaluation and for optimal non-linear taxation, the focus is on the situation of individuals with the most disadvantaged characteristics who work full time and spend a certain (high) amount in human capital.
Original languageEnglish
Place of PublicationMaastricht
PublisherMaastricht University, Graduate School of Business and Economics
Publication statusPublished - 1 Jan 2013

Publication series

SeriesGSBE Research Memoranda
Number024

Cite this

Fleurbaey, M., & Valletta, G. (2013). Fair optimal tax with endogenous productivities. Maastricht University, Graduate School of Business and Economics. GSBE Research Memoranda, No. 024