Optimal taxation when people do not maximize well-being

• 成果类型: Article
• 署名作者: Gerritsen, Aart
• 署名单位: Max Planck Society
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2016.10.006
• 发表日期: 2016
• 页码: 122-139
• 关键词: Optimal taxation; Corrective taxation; Subjective well-being

摘要

I derive the optimal nonlinear income tax when individuals do not necessarily maximize their own wellbeing. This generates a corrective argument for taxation: optimal marginal taxes are higher (lower) if individuals work too much (too little) from a well-being point of view. I allow for multidimensional heterogeneity and derive the optimal tax schedule in terms of measurable sufficient statistics. One of these statistics measures the degree to which individuals fail to optimize their labor supply. I empirically estimate this by using British life satisfaction data as a measure of well-being. I find that low-income workers tend to work 'too little' and high-income workers 'too much,' providing a motive for lower marginal tax rates at the bottom and higher marginal tax rates at the top of the income distribution. (C) 2016 Elsevier B.V. All rights reserved.