Abstract :
[en] We introduce labor contracts in a framework of optimal redistribution: firms have some local market power and try to discriminate among heterogeneous workers. In this setting we show that if the firms have perfect information, i.e., they perfectly discriminate against workers and take all the surplus, the best tax function is flat. If firms have imperfect information, i.e., if they offer incentive contracts, then (under some assumptions) the best redistributive taxation is regressive.
Disciplines :
Law, criminology & political science: Multidisciplinary, general & others
Business & economic sciences: Multidisciplinary, general & others
Commentary :
This paper is based on a substantial revision of Chapter 3 of the second author's unpublished Ph.D. dissertation at the University of Toulouse. We would like to thank Maurice Marchand, Alessandro Pavan, Pierre Pestieau, Pierre Picard, Motohiro Sato, Eric Strobl, Wilfried Zantman, two anonymous referees and an associate editor for help their and also seminar audiences in Copenhagen, Lausanne, Liège, Louvain-la-Neuve and Paris. All errors, of course, remain our own.
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