Program
Subjects
Works
Book Types
Back to issue
Cover of: Responsibility and Reward
Alexander W. Cappelen, Bertil Tungodden

Responsibility and Reward

Section: Articles
Volume 59 (2003) / Issue 1, pp. 120-140 (21)
Published 09.07.2018
DOI 10.1628/0015221032906117
  • article PDF
  • available
  • 10.1628/0015221032906117
Due to a system change, access problems and other issues may occur. We are working with urgency on a solution. We apologise for any inconvenience.
Summary
A basic premise of optimal tax theory is that information about individuals' productivity and time worked is unobservable and does not enter into the government's objective function. In this paper, we explore the implications of a framework where earning capacity both plays an intrinsic and an instrumental role. In particular we analyze how a redistributive mechanism should be designed so as to hold people responsible for their work effort, while at the same time compensate for differences in pre-tax productivity.