Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 1999:8: Comments on Social Insurance and the Optimum Piecewise Linear Income Tax

Michael Lundholm ()
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Michael Lundholm: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden

Abstract: Using Varian´s social insurance framework with a piecewise linear two bracket income tax, where t_1 is the tax rate in the lower bracket and t_1+t_2 is the tax rate in the upper bracket, Strawcynski (1998) claims that optimal requires t_1^*

Keywords: Optimal taxation; social insurance; piecewise linear taxes

JEL-codes: H21

6 pages, September 13, 1999

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