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| Volume 2, No. 1, April
2003
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| A
Note on Redistributive Taxation, Labor Supply, and National Income |
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| Volker Grossmann |
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Socioeconomic
Institute, University of Zurich, Switzerland |
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| Abstract |
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| This
paper shows that redistributive taxation can raise per capita income
provided that labor supply is sufficiently backward-bending at higher
wage rates. Moreover, we study general equilibrium effects regarding
work incentives for less able individuals. Finally, we show that
optimal taxation typically requires per capita income to decrease
with higher taxation at the margin. |
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Key words:
backward-bending labor supply; linear income tax; national income |
| JEL
classification:
H31; H21 |
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