Craig Brett's research is generously supported by the Canada Research Chair Program. This project was supported by the Social Sciences and Humanities Research Council of Canada. We thank Robin Boadway, Katherine Cuff, Firhouz Gavhari, Richard Harris, Fernando Ruiz, the associate editor, and the referee for helpful comments. We are also grateful to the participants in the Public Economics Conference in honor of Robin Boadway held at Queen's University, the 2009 Canadian Economics Association Meetings, and PET09 Galway.
Comparative Statics of Optimal Nonlinear Income Taxation with a Publicly Provided Input and a Nonlinear Production Technology
Article first published online: 10 JUN 2013
© 2013 Wiley Periodicals, Inc.
Journal of Public Economic Theory
Volume 15, Issue 4, pages 519–546, August 2013
How to Cite
BRETT, C. and WEYMARK, J. A. (2013), Comparative Statics of Optimal Nonlinear Income Taxation with a Publicly Provided Input and a Nonlinear Production Technology. Journal of Public Economic Theory, 15: 519–546. doi: 10.1111/jpet.12037
- Issue published online: 10 JUN 2013
- Article first published online: 10 JUN 2013
- Accepted manuscript online: 5 APR 2013 09:00AM EST
- Manuscript Accepted: 16 SEP 2011
- Manuscript Received: 2 DEC 2010
Comparative static properties of the solution to an optimal nonlinear income tax problem are provided for a model in which the government both designs a redistributive income tax schedule and provides a public input for a nonlinear production technology. These assumptions imply that wage rates are endogenous. The endogeneity of the wages necessitates taking account of general equilibrium effects of changes in the parameters of the model that are not present when the technology is linear.