Original title: Organization of knowledge and taxation
Authors: Kapička, Marek ; Slavík, Ctirad
Document type: Research reports
Year: 2021
Language: eng
Series: CERGE-EI Working Paper Series, volume: 705
Abstract: This paper studies how labor income taxation interacts with the organization of knowledge and production, and ultimately the distribution of wages in the economy. A more progressive tax system reduces the time that managers allocate to work. This makes the organization of production less efficient and reduces wages at both tails of the distribution, which increases lower tail wage inequality and decreases upper tail wage inequality. The optimal tax system is substantially less progressive than the current one in the United States. However, if wages were exogenous, the optimal tax progressivity would be much higher.
Keywords: income taxation; inequality; knowledge based hierarchies

Institution: Economics Institute AS ČR (web)
Document availability information: Fulltext is available at external website.
External URL: https://www.cerge-ei.cz/pdf/wp/Wp705.pdf
Original record: http://hdl.handle.net/11104/0322925

Permalink: http://www.nusl.cz/ntk/nusl-508178


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