Desirable to have regressive tax structure

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Reference no: EM131098734

1. Explain why it might be desirable to have a regressive tax structure, even if the social welfare function is utilitarian, when general equilibrium effects of taxes are taken into account. Would it ever be desirable to impose a negative marginal tax rate on very- high- income individuals?

2. Under what circumstances will an increase in the progressivity of the tax schedule increase the degree of before tax inequality?

Reference no: EM131098734

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