Optimal income taxation and redistribution to the unemployed

2017 Fiscal Year Final Research Report

• Project/Area Number: 15K17073
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Public finance/Public economy
• Research Institution: Shizuoka University
• Principal Investigator: Takamatsu Yoshihiro 静岡大学, 人文社会科学部, 准教授 (90454016)
• Project Period (FY): 2015-04-01 – 2018-03-31
• Keywords: 最適所得税 / 就業選択 / 所得再分配政策 / 人的資本投資 / tagging / 年齢に依存した税制

Outline of Final Research Achievements

In this study, I investigate the optimal labor income taxation with extensive labor margin and propose incentive compatible redistribution policies. In particular, I consider the optimal income taxation with human capital investment, the optimal age-dependent income taxation in a dynamic extensive margin, and the optimal income taxation with involuntary unemployment. I derive the optimal age-specific participation tax rate in the dynamic extensive model. Our numerical simulations suggest that a negative participation tax should be restricted to young households. With human capital investment, the role of the capital income tax is to promote human capital investment and mitigate the labor income tax distortions on it.

Free Research Field

財政学