The Taxation of Superstars ∗

  title={The Taxation of Superstars ∗},
  author={Florian Scheuer and Iv{\'a}n Werning},
How are optimal taxes affected by superstar phenomena? To answer this question, we extend the Mirrlees model to incorporate an assignment problem in the labor market that generates superstar effects. Perhaps surprisingly, rather than providing a rationale for higher taxes, we show that superstar effects provide a force for lower marginal taxes conditional… CONTINUE READING