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The Optimal Progressive Income Tax -- The Existence and the Limit Tax Rates


  • Mamoru Kaneko

    (University of Tsukuba)


The purpose of this paper is to consider the problem of optimal income taxation in the domain of progressive (convex) income tax function. This paper proves the existence of an optimal tax function and that the optimal marginal and average tax rates tend asymptotically to 100 percent as income level becomes arbitrarily high.

Suggested Citation

  • Mamoru Kaneko, 1981. "The Optimal Progressive Income Tax -- The Existence and the Limit Tax Rates," Cowles Foundation Discussion Papers 599, Cowles Foundation for Research in Economics, Yale University.
  • Handle: RePEc:cwl:cwldpp:599
    Note: CFP 558.

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    References listed on IDEAS

    1. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Oxford University Press, vol. 38(2), pages 175-208.
    2. Ray C. Fair, 1971. "The Optimal Distribution of Income," The Quarterly Journal of Economics, Oxford University Press, vol. 85(4), pages 551-579.
    3. Seade, J. K., 1977. "On the shape of optimal tax schedules," Journal of Public Economics, Elsevier, vol. 7(2), pages 203-235, April.
    4. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    5. Kaneko, Mamoru, 1981. "The Nash social welfare function for a measure space of individuals," Journal of Mathematical Economics, Elsevier, vol. 8(2), pages 173-200, July.
    6. Kaneko, Mamoru & Nakamura, Kenjiro, 1979. "The Nash Social Welfare Function," Econometrica, Econometric Society, vol. 47(2), pages 423-435, March.
    7. Ordover, J. A. & Phelps, E. S., 1979. "The concept of optimal taxation in the overlapping-generations model of capital and wealth," Journal of Public Economics, Elsevier, vol. 12(1), pages 1-26, August.
    8. Aumann, Robert J., 1977. "The St. Petersburg paradox: A discussion of some recent comments," Journal of Economic Theory, Elsevier, vol. 14(2), pages 443-445, April.
    9. Feldstein, Martin, 1973. "On the optimal progressivity of the income tax," Journal of Public Economics, Elsevier, vol. 2(4), pages 357-376.
    10. Kim, Ki Hang & Roush, Fred W., 1981. "Economic planning based on social preference functions," Mathematical Social Sciences, Elsevier, vol. 1(2), pages 193-200, January.
    11. Mamoru Kaneko, 1981. "On the Existence of an Optimal Income Tax Schedule," Review of Economic Studies, Oxford University Press, vol. 48(4), pages 633-642.
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