Optimal Labor Income Taxation under Maximin: An Upper Bound
AbstractThis paper assumes the standard optimal income tax model of Mirrlees (Review of Economic Studies, 1971). It gives fairly mild conditions under which the optimal nonlinear labor income tax profile derived under maximin has higher marginal tax rates than the ones derived with welfarist criteria that sum over the population any concave transformation of individual utilities. This strict dominance result is always valid close to the bounds of the skill distribution and almost everywhere (except at the upper bound) when quasilinear-in-consumption preferences are assumed.
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Bibliographic InfoPaper provided by Department of Economics, Norwegian School of Economics in its series Discussion Paper Series in Economics with number 5/2010.
Length: 9 pages
Date of creation: 02 Feb 2010
Date of revision:
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Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Phone: +47 55 959 277
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Web page: http://www.nhh.no/sam/
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Optimal income taxation; maximin.;
Other versions of this item:
- Laurence Jacquet, 2010. "Optimal labor income taxation under maximin: An upper bound," Economics Bulletin, AccessEcon, vol. 30(4), pages 3152-3160.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
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