Optimal tax progressivity in unionised labour markets : what are the driving forces?


Boeters, Stefan


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URL: http://ub-madoc.bib.uni-mannheim.de/2587
URN: urn:nbn:de:bsz:180-madoc-25876
Document Type: Working paper
Year of publication: 2009
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: J64 J51 J22 H21 ,
Subject headings (SWD): OECD , Lohnsteuer , Steuerprogression , Optimale Besteuerung , Tarifpolitik , Arbeitslosigkeit , Arbeitsangebot
Keywords (English): labour taxation , tax progressivity , optimal taxation , collective wage bargaining , unemployment
Abstract: In labour markets with collective wage bargaining higher progressivity of the labour income tax creates a trade-off. On the one hand, wages are lowered and unemployment decreases, on the other hand, the individual labour supply decision is distorted at the hours-of-work margin. The optimal level of tax progressivity within this trade-off is determined using a numerical general equilibrium model with imperfect competition on the goods market, collective wage bargaining and a labour-supply module calibrated to empirically plausible elasticity values. The model is calibrated to macroeconomic and institutional parameters of both the OECD average and a number of individual OECD countries. In most cases the optimal degree of tax progressivity is below the actual level. A decomposition approach shows that the optimal level is increased by high unemployment and by the general tax level.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Boeters, Stefan (2009) Optimal tax progressivity in unionised labour markets : what are the driving forces? Open Access [Working paper]
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