The Discriminative Effect of Income and Firm Taxes

Abstract:     
How can we reduce gender and racial discrimination? One answer is that we can do it by relying on the invisible hand. Another answer is that since people in the marketplace have racial preferences, we need to have anti-discrimination laws in order to decrease discrimination. The surprising answer this paper proposes is that we can reduce gender and racial discrimination by reducing income and firm taxes. When the gains from discrimination are untaxed, a higher tax will lead to more discrimination. We are going to show this proposition, and then we are going to explain, why it is realistic to think, that discrimination gains are untaxed.

Number of Pages in PDF File: 9

Keywords: Tax, Discrimination, Law and Economics, Gender, Race

JEL Classification: K00

working papers series