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| Author: | Gaube, T. |
| Title: | Income taxation, endogenous factor prices and production efficiency |
| Journal: | Scandinavian Journal of Economics
2005 : VOL. 107:2, p. 335-352 |
| Index terms: | Efficiency Endogenous variables Income tax |
| Language: | eng |
| Abstract: | This paper analyses two-type income tax model with endogenous wages and it is shown that production efficiency is violated in the optimum with 1) non-linear and 2) linear income taxation if and only if a distortionary tax schedule is implemented. These results complement earlier results in the literature. |
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