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Utilitarian preference for redistribution: a concern with max-min

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  • George A. Waters

    (Illinois State University)

Abstract

This paper studies an optimal linear tax or basic income regime with an extensive margin in the supply of labor and a utililitarian welfare criterion. The presence the extensive margin in labor supply breaks the connection between allocational efficiency and aggregate utility maximization. In a general framework, some redistribution maximizes aggregate utility, but a lesser degree than what Rawls’ max-min criterion would require. Rawls’ concept of the Original Position is useful, but the rationality of the max-min criterion is questionable.

Suggested Citation

  • George A. Waters, 2018. "Utilitarian preference for redistribution: a concern with max-min," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 42(2), pages 386-396, April.
    • Handle: RePEc:spr:jecfin:v:42:y:2018:i:2:d:10.1007_s12197-017-9413-y
    DOI: 10.1007/s12197-017-9413-y
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    References listed on IDEAS

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    1. Stiglitz, Joseph E., 1987. "Pareto efficient and optimal taxation and the new new welfare economics," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 15, pages 991-1042, Elsevier.
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    3. Charles F. Manski, 2014. "Choosing Size of Government Under Ambiguity: Infrastructure Spending and Income Taxation," Economic Journal, Royal Economic Society, vol. 0(576), pages 359-376, May.
    4. Thomas Piketty & Emmanuel Saez, 2012. "Optimal Labor Income Taxation," NBER Working Papers 18521, National Bureau of Economic Research, Inc.
    5. Dixit, Avinash K & Sandmo, Angar, 1977. " Some Simplified Formulae for Optimal Income Taxation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 79(4), pages 417-423.
    6. Diamond, P., 1980. "Income taxation with fixed hours of work," Journal of Public Economics, Elsevier, vol. 13(1), pages 101-110, February.
    7. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309-309.
    8. Stiglitz, Joseph E., 1982. "Self-selection and Pareto efficient taxation," Journal of Public Economics, Elsevier, vol. 17(2), pages 213-240, March.
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    More about this item

    Keywords

    Basic income; Original Position; Max-min; Redistribution;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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