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dc.contributor.authorAronsson, Thomas
dc.contributor.authorJohansson-Stenman, Olof
dc.date.accessioned2020-05-18T11:01:52Z
dc.date.available2020-05-18T11:01:52Z
dc.date.issued2020-05
dc.identifier.issn1403-2465
dc.identifier.urihttp://hdl.handle.net/2077/64460
dc.descriptionJEL Classification: D03, D62, H23.sv
dc.description.abstractAbstract This paper analyzes Pareto-efficient marginal income taxation taking into account externalities induced through individual inequality aversion, meaning that people have preferences for equality. In doing so, we distinguish between four different and widely used models of inequality aversion. The results show that empirically and experimentally quantified degrees of inequality aversion have potentially very strong implications for Pareto-efficient marginal income taxation. It also turns out that the type of inequality aversion (self-centered vs. non-self-centered), and the specific measures of inequality used, matter a great deal. For example, based on simulation results mimicking the disposable income distribution in the U.S., the preferences suggested by Fehr and Schmidt (1999) imply monotonically increasing marginal income taxes, with large negative marginal tax rates for low-income individuals and large positive marginal tax rates for high-income ones. In contrast, the in many respects comparable model by Bolton and Ockenfels (2000) implies close to zero marginal income tax rates for all.sv
dc.format.extent44sv
dc.language.isoengsv
dc.relation.ispartofseriesWorking Papers in Economicssv
dc.relation.ispartofseries785sv
dc.subjectPareto-efficient taxationsv
dc.subjectInequality aversionsv
dc.subjectSelf-centered inequality aversionsv
dc.subjectNon-self-centered inequality aversionsv
dc.subjectFehr and Schmidt preferencessv
dc.subjectBolton and Ockenfels preferencessv
dc.subjectGINI coefficientsv
dc.subjectCoefficient of variationsv
dc.titleInequality Aversion, Externalities, and Pareto-Efficient Income taxationsv
dc.typeTextsv
dc.type.svepreportsv
dc.contributor.organizationDepartment of Economics, University of Gothenburgsv


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