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dc.date.accessioned2018-08-31T09:42:05Z
dc.date.available2019-06-23T22:46:46Z
dc.date.created2018-01-30T17:34:06Z
dc.date.issued2017
dc.identifier.citationHeathcote, Jonathan Storesletten, Kjetil Violante, Giovanni l. . Optimal Tax Progressivity: An Analytical Framework. Quarterly Journal of Economics. 2017, 132(4), 1693-1754
dc.identifier.urihttp://hdl.handle.net/10852/64023
dc.description.abstractWhat shapes the optimal degree of progressivity of the tax and transfer system? On the one hand, a progressive tax system can counteract inequality in initial conditions and substitute for imperfect private insurance against idiosyncratic earnings risk. On the other hand, progressivity reduces incentives to work and to invest in skills, distortions that are especially costly when the government must finance public goods. We develop a tractable equilibrium model that features all of these trade-offs. The analytical expressions we derive for social welfare deliver a transparent understanding of how preference, technology, and market structure parameters influence the optimal degree of progressivity. A calibration for the U.S. economy indicates that endogenous skill investment, flexible labor supply, and the desire to finance government purchases play quantitatively similar roles in limiting optimal progressivity. In a version of the model where poverty constrains skill investment, optimal progressivity is close to the U.S. value. An empirical analysis on cross-country data offers support to the theory.en_US
dc.languageEN
dc.publisherMIT Press
dc.titleOptimal Tax Progressivity: An Analytical Frameworken_US
dc.typeJournal articleen_US
dc.creator.authorHeathcote, Jonathan
dc.creator.authorStoresletten, Kjetil
dc.creator.authorViolante, Giovanni l.
cristin.unitcode185,17,6,0
cristin.unitnameØkonomisk institutt
cristin.ispublishedtrue
cristin.fulltextpostprint
cristin.qualitycode2
dc.identifier.cristin1557111
dc.identifier.bibliographiccitationinfo:ofi/fmt:kev:mtx:ctx&ctx_ver=Z39.88-2004&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.jtitle=Quarterly Journal of Economics&rft.volume=132&rft.spage=1693&rft.date=2017
dc.identifier.jtitleQuarterly Journal of Economics
dc.identifier.volume132
dc.identifier.issue4
dc.identifier.startpage1693
dc.identifier.endpage1754
dc.identifier.doihttp://dx.doi.org/10.1093/qje/qjx018
dc.identifier.urnURN:NBN:no-66571
dc.type.documentTidsskriftartikkelen_US
dc.type.peerreviewedPeer reviewed
dc.source.issn0033-5533
dc.identifier.fulltextFulltext https://www.duo.uio.no/bitstream/handle/10852/64023/2/Optimal%2BTax.pdf
dc.type.versionAcceptedVersion
dc.relation.projectEU/ERC Advanced Grant IPCDP-324085


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