Optimal taxation and non-competitive labour markets: Analysis of tax-benefit reforms using the ZEW linked micro/macro model
The aim of this project is to analyse reforms of the German income tax
system, using an optimal taxation approach. Furthermore, we account for
possible interaction effects due to the non-competitiveness of the labour markets.
We adapt the ZEW micro/macro model to evaluate the optimal tax progression,
endogenizing the labour supply and collective wage negotiation.
The innovations of this project lie in (i) the modelisation of the
labour supply, accounting for involuntary unemployment, (ii) the integration of
an optimal taxation design into the micro/macro model, and (iii) the
implementation of a welfare module to compare different concepts of
Duration: 01.03.2008 - 31.12.2009