Optimal labor income taxation under maximin: An upper bound
This paper compares marginal income tax rates for the maximin versus a welfarist criterion in the standard Mirleesian optimal income tax problem. It derives fairly mild conditions under which the former is higher than the latter. This strict dominance result is always valid close to the bounds of the skill distribution and almost everywhere, except at the upper bound, if preferences are quasilinear in consumption.
Volume (Year): 30 (2010)
Issue (Month): 4 ()
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