Full Citation

Title: Technical Change, Wage Inequality and Taxes: ONLINE APPENDIX

Citation Type: Journal Article

Publication Year: 2015

ISBN:

ISSN:

DOI: 10.1257/aer.20140466

NSFID:

PMCID:

PMID:

Abstract: This paper considers the normative implications of technical change for tax policy design. A task-to-talent assignment model of the labor market is embedded into an optimal tax problem. Technical change modifies equilibrium wage growth across talents and the substitutability of talents across tasks. The overall optimal policy response is to reduce marginal income taxes on low to middle incomes, while raising those on middle to high incomes. The reform favors those in the middle of the income distribution, reducing their average taxes while lowering transfers to those at the bottom.

Url: https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20140466

Url: https://www.aeaweb.org/aer/app/10510/20140466_app.pdf

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Authors: Ales, Laurence; Kurnaz, Musab; Sleet, Christopher

Periodical (Full): American Economic Review

Issue: 10

Volume: 105

Pages: 3061-3101

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Other

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