Means testing and tax rates on earnings

AUTHORS: Mike Brewer ; Guy Laroque ; Andrew Shephard
COMMENTATORS: Hilary Hoynes

The discussion of this chapter will cover the present state of optimal income tax theory and its applicability to the real world. The chapter will take as a starting point the classic analysis of Mirrlees (1971) and show how the determination of the optimal rate structure as laid out by Mirrlees is affected by introducing participation elasticities. The closely related issue of migration across countries will be discussed. An empirical application for the British case will be given. The paper will discuss a number of extensions of the optimal tax/transfer problem to cast light on various current policy debates on tax and transfer policy. It will also address the question of how families should be taxed and whether taxes and transfers should be assessed at the individual or the household level.

Related papers and presentations

PLEASE NOTE: presentations from the September meeting represent draft work in progress. Factual accuracy is not guaranteed, and opinions may not be the fully-formed views of authors. They are posted here to stimulate discussion, and should not be quoted or cited without the authors' permission.

Means-testing and tax rates on earnings: a contribution to the Mirrlees Review
Mike Brewer, Emmanuel Saez and Andrew Shephard
This presentation was given at the Hanasaari Cultural Centre at the workshop, Taxation, Public Provision and the Future of the Nordic Welfare Model.
19 Jun 2009 , Presentations

Reform tax credits to boost weak work incentives, says study prepared for the Mirrlees Review
Mike Brewer, Emmanuel Saez and Andrew Shephard
Britain's tax credit and benefit system should be overhauled to strengthen work incentives for people on low incomes, to increase simplicity and certainty for families, and to reduce fraud and administration costs for the taxpayer, according to a study commissioned by the Mirrlees Review of the British tax system.
21 Apr 2008 , IFS Press Releases

A plan for reforming the household tax and transfer system
Mike Brewer, Emmanuel Saez and Andrew Shephard
This presentation was delivered at the IFS Residential Conference 2007.
24 Apr 2007 , Presentations

Comments on: Optimal household labor income tax and transfer programs
Guy Laroque
This presentation was delivered at the IFS Residential Conference 2007.
24 Apr 2007 , Presentations

Optimal household labor income tax and transfer programs
Mike Brewer, Emmanuel Saez and Andrew Shephard
This draft paper forms part of the Mirrlees Review and was presented at the IFS Residential Conference 2007.
20 Apr 2007 , Conference Papers

Optimal Household Labor Income Tax and Transfer Programs
Robert Moffitt
20 Apr 2007 , Presentations

Optimal labour income tax and transfer programs for individuals and families
Mike Brewer, Emmanuel Saez and Andrew Shephard
26 Oct 2006 , Presentations

The Review is funded by the Nuffield Foundation and the ESRC.