Skip to Main content Skip to Navigation
New interface
Journal articles

Tax me if you can! Optimal Nonlinear Income Tax Between Competing Governments

Abstract : We investigate how potential tax-driven migrations modify the Mirrlees income tax schedule when two countries play Nash. The social objective is the maximin and preferences are quasi-linear in consumption. Individuals differ both in skills and migration costs, which are continuously distributed. We derive the optimal marginal income tax rates at the equilibrium, extending the Diamond-Saez formula. We show that the level and the slope of the semi-elasticity of migration (on which we lack empirical evidence) are crucial to derive the shape of optimal marginal income tax. JEL Codes: D82, H21, H87, F22.
Complete list of metadata

Cited literature [44 references]  Display  Hide  Download
Contributor : Elisabeth Lhuillier Connect in order to contact the contributor
Submitted on : Thursday, April 2, 2020 - 4:27:16 PM
Last modification on : Friday, August 5, 2022 - 2:49:41 PM


Lehmann, Simula, Trannoy_Tax m...
Files produced by the author(s)



Etienne Lehmann, Laurent Simula, Alain Trannoy. Tax me if you can! Optimal Nonlinear Income Tax Between Competing Governments. Quarterly Journal of Economics, 2014, 129 (4), pp.1995--2030. ⟨10.1093/qje/qju027⟩. ⟨hal-01474437⟩



Record views


Files downloads