The Impact of Changing Skill Levels
on Optimal Nonlinear Income Taxes
Working Paper No. 07-W08R
Craig Brett and John A. Weymark
ABSTRACT [article]
The impact of changing an individual's skill level on the solution to a finite population
version of the Mirrlees optimal nonlinear income tax problem with quasilinear-in-leisure preferences is investigated. It is shown that it is possible to sign the directions of change in everyone's optimal
consumptions and optimal marginal tax rates in response to such a change.
Keywords and Phrases: Optimal income taxation, comparative statics
JEL Classification Numbers: D82, H21