@techreport{Loffler2004Complexity,
abstract = {We analyze optimal income taxes with deductions for work-related or consumptive
goods. We consider two cases. In the first case (called a complex tax system)
the tax authorities can exactly distinguish between consumptive and work-related
expenditures. In the second case (called a simple tax system) this distinction is not
exact. Assuming additively separable utility functions, we show that work-related
expenditures should be fully deductible in the first case while deduction rates should
be less than 100 percent in the second case. Under further simplifying assumptions,
we also show that the simple system can be characterized by higher tax burdens on
low income earners and less redistribution.},
address = {Berlin},
author = {Andreas L\"{o}ffler and Rainald Borck and Pio Baake},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {H21; 330; optimal taxation; tax deductions; work-related expenditures; Einkommensteuer; Optimale Besteuerung; Werbungskosten; Steuerbeg\"{u}nstigung; Steuerprogression; Theorie},
language = {eng},
number = {409},
publisher = {Deutsches Institut f\"{u}r Wirtschaftsforschung (DIW)},
title = {Complexity and Progressivity in Income Tax Design : Deductions for Work-Related Expenses},
type = {DIW-Diskussionspapiere},
url = {http://hdl.handle.net/10419/18105},
year = {2004}
}
