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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/46492
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| Title: | | Labor migration and the case for flat tax  |
| Authors: | | Blumkin, Tomer Sadka, Efraim Shem-Tov, Yotam |
| Issue Date: | | 2011 |
| Series/Report no.: | | CESifo working paper: Public Finance 3471 |
| Abstract: | | In this paper we employ a tax-competition model to demonstrate that in the presence of migration the re-distributive advantage of a non-linear income tax system over a linear (flat) one is significantly mitigated relative to the autarky (no-migration) equilibrium. When migration threats are sufficiently strong, a coordinated shift from a non-linear (prima-facie superior) system to a flat (inferior) regime is not too welfare-costly, even when the extent of re-distribution is significant. Therefore, such a shift may be warranted on administrative grounds. We also show, as expected, that migration reduces the extent of redistribution. |
| Subjects: | | flat tax re-distribution migration tax-competition |
| JEL: | | D60 H20 H50 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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