%0 Report
        %A Apps, Patricia
%A Long, Ngo Van
%A Rees, Ray
        %T Optimal Piecewise Linear Income Taxation
        %D 2011
        %8 2011 Oct
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 6007
        %U https://www.iza.org/index.php/publications/dp6007
        %X Given its significance in practice, piecewise linear taxation has received relatively little attention in the literature. This paper offers a simple and transparent analysis of its main characteristics. We fully characterize optimal tax parameters for the cases in which budget sets are convex and nonconvex respectively. A numerical analysis of a discrete version of the model shows the circumstances under which each of these cases will hold as a global optimum. We find that, given plausible parameter values and wage distributions, the globally optimal tax system is convex, and marginal rate progressivity increases with rising inequality.
        %K taxation
%K piecewise linear
%K income