Negative marginal tax rate on very- high-income individuals

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Reference no: EM131096829

1. If you believe that a proportional consumption tax was the best tax, what are the various ways in which you could levy (collect) it? Might there be differences in administrative costs associated with levying such a tax in different ways?

2. Explain why it might be desirable to have a regressive tax structure, even if the social welfare function is utilitarian, when general equilibrium effects of taxes are taken into account. Would it ever be desirable to impose a negative marginal tax rate on very- high- income individuals?

3. Under what circumstances will an increase in the progressivity of the tax schedule increase the degree of before tax inequality?

4. To what extent do you think that indifferences in views concerning how progressive our tax structure should be reflect differences in values, and to what extent do they reflect differences in judgments concerning the economic consequences of progressivity (deadweight loss, shifting)?

Reference no: EM131096829

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