@techreport{NBERw1163,
 title = "Variable Earnings and Nonlinear Taxation",
 author = "Michael Rothschild and Robert Moffitt",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "1163",
 year = "1988",
 month = "1988",
 URL = "http://www.nber.org/papers/w1163",
 abstract = {We explore the interaction between two facts. The first is that income is variable; the second is that the tax and transfer system transforms before tax income into after tax income in highly non-linear ways. The effect is to penalize (and reward) income variability in a manner which is both substantial and capricious.},
}