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Chang, Bo Hyun
Chang, Yongsung
Kim, Sun-Bin
Year of Publication: 
Series/Report no.: 
LIS Working Paper Series 662
We develop a quantitative heterogeneous-agents general equilibrium model that reproduces the income inequalities of 32 countries in the Organization for Economic Co-operation and Development. Using this model, we compute the optimal income tax rate for each country under the equal-weight utilitarian social welfare function. We simulate the voting outcome for the utilitarian optimal tax reform for each country. Finally, we uncover the Pareto weights in the social welfare functions of each country that justify the current redistribution policy.
Income Inequality
Optimal Tax
Pareto Weights
Political Economy
Document Type: 
Working Paper
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