Tax system rewards low-skilled workers with savings subsidy, boosts economic equality
Researchers have found a way to design a tax system that can help distribute resources efficiently in an economy where people have different skills and incomes. By looking at observable factors like wealth, current earnings, and savings, the tax system can be tailored to provide support to those with lower skills. This means that low-skilled individuals may receive a subsidy on their savings to help them improve their financial situation.