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dc.contributor.authorBlomquist, Sörenen_US
dc.contributor.authorChristiansen, Vidaren_US
dc.description.abstractNon-linear income taxes and linear commodity taxes are analysed when people differ withrespect to ability, high-skilled agents have heterogeneous preferences, and neither individualabilities nor preferences are observable. The paper highlights how informational constraintsmay motivate differential treatment of people with different preferences for leisure even ifunequal treatment is not desirable per se. Which preference type will be better or worse off isshown to depend on the self-selection constraints associated with the information asymmetry.We characterize pure income tax optima, which may be bunching or separatingoptima. In particular, the income tax may not be able to distinguish between those lowincomepeople who are low-skilled and those who have strong preference for leisure. As isshown, there may still be an impact on the optimum income tax schedule as it will depend onthe composition of the population with respect to types of individuals. Finally, the paperaddresses what can be achieved by commodity taxes when preferences are heterogeneous, inparticular, in terms of targeting groups that the income tax is incapable of discriminatingbetween.en_US
dc.publisher|aCenter for Economic Studies and Ifo Institute (CESifo) |cMunichen_US
dc.relation.ispartofseries|aCESifo Working Paper |x1244en_US
dc.subject.keywordoptimum taxationen_US
dc.subject.keywordheterogeneous preferencesen_US
dc.subject.keywordasymmetric informationen_US
dc.subject.stwOptimale Besteuerungen_US
dc.subject.stwOptimale Besteuerungen_US
dc.titleTaxation and heterogeneous preferencesen_US
dc.typeWorking Paperen_US

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