Description Usage Arguments Value See Also Examples

Ability (n) and elasticity (e) determine an agent's earnings and utility. This function determines the tangency point of the agent's utility with the budget line and returns the distance between the utility of earning at that point and the utility of earning at the notch/kink point. This function is mostly used to find the marginal buncher.

1 | ```
util_equalizer(n, elas, t1, t2, Tax, zstar)
``` |

`n` |
Ability of person (earnings with zero tax) |

`elas` |
elasticity of earnings w.r.t. net-of-tax rate |

`t1` |
Tax rate before notch/kink |

`t2` |
Tax rate after notch/kink |

`Tax` |
height of notch (zero for pure kink) |

`zstar` |
place of notch/kink (critical earning point) |

Absolute value of utility at tangency minus utility at kink/notch point.

1 | ```
util_equalizer(1200,0.2,0.1,0.3,100,1000)
``` |

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