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The Optimal Income Tax: Restatement and Extensions

  • Stefan Homburg

The paper presents an axiomatic restatement of the standard approach to nonlinear income taxation. It assumes a finite number of taxpayers rather than an uncountable infinity. Analytical tools are developed which facilitate proving the existence of tax schedules that are continuous, differentiable almost everywhere, and possess left-and right-derivatives at every point of non-differentiability. These tax schedules even become differentiable in the limit. Numerical examples are provided.

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Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

Volume (Year): 58 (2001)
Issue (Month): 4 (November)
Pages: 363-395

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Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200211)58:4_363:toitra_2.0.tx_2-f
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  17. Weibull, Jorgen W., 1989. "A note on the continuity of incentive schedules," Journal of Public Economics, Elsevier, vol. 39(2), pages 239-243, July.
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