Optimal income taxation: and ordinal approach
In a model where agents have unequal production skills and different preferences, we build social welfare functions which rely only on ordinal non-comparable information on individual preferences. Social welfare functions are required to satisfy properties of compensation for inequalities in skills, and responsibility for preferences. Then, assuming skills and preferences are unobservable, we use these social welfare functions to design optimal income tax schemes. We obtain ethical foundations for, among others, a maximized minimal income, a zero marginal tax rate for low incomes, and increasing marginal tax rates.
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- W. Bossert & M. Fleurbaey & D. Van de gaer, 1996.
"On second-best compensation,"
THEMA Working Papers
96-07, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
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- Bossert, W & Fleurbaey, M & Van de gaer, D, 1996. "On Second-Best Compensation," Working Papers 9601, University of Waterloo, Department of Economics.
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- Marc Fleurbaey & Maurice Salles & John Weymark, 2008. "Justice, Political Liberalism and Utilitarianism," Post-Print hal-00246415, HAL.
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"Fair social orderings,"
CORE Discussion Papers RP
1995, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Kaneko, Mamoru & Nakamura, Kenjiro, 1979. "The Nash Social Welfare Function," Econometrica, Econometric Society, vol. 47(2), pages 423-435, March.
- M. Fleurbaey & F. Maniquet, 2000. "Fair Social Orderings With Unequal Production Skills," THEMA Working Papers 2000-17, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Kevin W. S. Roberts, 1980. "Possibility Theorems with Interpersonally Comparable Welfare Levels," Review of Economic Studies, Oxford University Press, vol. 47(2), pages 409-420.
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