Income shifting as income creation?

• 成果类型: Article
• 署名作者: Selin, Hakan; Simula, Laurent
• 署名单位: Ecole Normale Superieure de Lyon (ENS de LYON)
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2019.104081
• 发表日期: 2020
• 关键词: income shifting; taxation; optimal taxation; Labor income tax

摘要

Income shifting arises as one of the key questions when thinking about the design of a tax system as a whole. We study a simple economy, involving a benevolent policy-maker and a population of agents differing in terms of productivities, labor supply elasticities, and shifting costs. Paying special attention to the cost structure of income shifting, we highlight that when people who shift easily along the extensive margin are also more elastic in labor supply, giving them a lower tax rate is a good thing, and the government should not necessarily combat income shifting. This mechanism may be compared to third-degree price discrimination in industrial organization and works as a form of endogenous tagging. We explore this possibility numerically before showing that our results derived for a policy-maker optimally adjusting two linear tax instruments carry over when two fully non-linear taxes are potentially available. (C) 2019 Elsevier B.V. All rights reserved.