The Optimal Income Tax When Poverty Is a Public "Bad"

Wane, Waly

World Bank, Washington, DC

关键词: ASYMMETRIC INFORMATION;    BENCHMARK;    CONSUMERS;    CONSUMPTION FUNCTION;    CONSUMPTION LEVELS;   

DOI  :  10.1596/1813-9450-2270
RP-ID  :  WPS2270

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The author considers poverty as anaggregate negative externality that affects people indifferent ways, depending on their aversion to poverty. Ifsociety is on average averse to poverty, then the optimalincome tax schedule displays negative marginal tax rates, atleast for less skilled individuals. Negative marginal taxrates play the role of a Pigouvian earnings subsidy,fostering the supply of poor individuals to provide labor.The result of no distortion at the endpoints, which istherefore violated, can be restored once the focus isshifted from individual to social distortions.