Radical Tax Reforms Could Boost Incomes for High and Low Earners
This study looks at how to create fair tax systems that benefit everyone. By using a method called self-selection, the researchers discovered some new insights. They found that having random tax systems can be beneficial. If people have different skills and talents, changing taxes could have a big impact. For example, high-earners might need to pay less tax while low-earners pay more. Also, if people have different preferences, taxing higher incomes less could be fair. Lastly, if someone's income is unpredictable, they might need to pay a lot in taxes. These findings challenge previous ideas about the best way to set up taxes and show that the real-life effects are important to consider.