We analyze Pareto-efficient tax deduction rules for work-related expenses. Pareto efficiency dictates a strict rule marginal deductions along the income distribution. An immediate implication is recipe designing Pareto-improving reforms. apply our theory and simulate reform that introduces non-care household services (housekeeping, gardening, laundry) in United States. The combines rates betwee...

Designing Optimal Taxes with a Microeconometric Model of Household Labour Supply The purpose of this paper is to present an exercise where we identify optimal income tax rules under the constraint of fixed tax revenue. To this end, we estimate a microeconomic model with 78 parameters that capture heterogeneity in consumption-leisure preferences for singles and couples as well as in job opportun...

The construction industry in the United States has experienced a remarkable downturn in the past five years. In the mid 1980s, new housing starts averaged nearly 1.8 million per year, slightly below the record pace of 2 million per year in the late 1970s. By 1991, however, the number of new housing starts was just above 1 million. The share of GNP devoted to residential investment fell to 3.3 p...