The paper analyzes nonlinear tax schedules that are identified by maximizing a welfare function represented by a weighted summation of net utilities over a set of n>=3 differing individuals. We demonstrate that some of the feasible and Pareto efficient tax schedules that satisfy self-selection can only be identified by maximizing a welfare function of the above form if (at least) one of the individuals in the economy is assigned a negative weight.
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Paper provided by Lund University, Department of Economics in its series Working Papers with number
2005:41.
Length: 10 pages Date of creation: 30 Sep 2005 Date of revision: Publication status: Published in International Journal of Economic Theory, 2007, pages 49-58. Handle: RePEc:hhs:lunewp:2005_041
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