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dc.contributor.authorLöffler, Andreasen_US
dc.contributor.authorBorck, Rainalden_US
dc.contributor.authorBaake, Pioen_US
dc.description.abstractWe 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.en_US
dc.publisherDeutsches Institut für Wirtschaftsforschung (DIW) Berlinen_US
dc.relation.ispartofseriesDIW-Diskussionspapiere 409en_US
dc.subject.keywordoptimal taxationen_US
dc.subject.keywordtax deductionsen_US
dc.subject.keywordwork-related expendituresen_US
dc.subject.stwOptimale Besteuerungen_US
dc.titleComplexity and Progressivity in Income Tax Design : Deductions for Work-Related Expensesen_US
dc.typeWorking Paperen_US
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