The concept of a lower bound on optimal linear taxes is analyzed. A marginal tax rate is defined to be optimal if the corresponding state of the economy is a welfare maximum for some social welfare function reflecting at least a minimal aversion to inequality. The lower bound on optimal tax rates is proved to be strictly positive. This tax rate is also calculated in a numerical example based on Swedish data; the value obtained is 29 percent. Copyright 1990 by The editors of the Scandinavian Journal of Economics.
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