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

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  • Mamoru Kaneko

    (University of Tsukuba)

Abstract

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

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    1. Seade, J. K., 1977. "On the shape of optimal tax schedules," Journal of Public Economics, Elsevier, vol. 7(2), pages 203-235, April.
    2. Kesselman, Jonathan R., 1976. "Egalitarianism of earnings and income taxes," Journal of Public Economics, Elsevier, vol. 5(3-4), pages 285-301.
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    6. Feldstein, Martin, 1973. "On the optimal progressivity of the income tax," Journal of Public Economics, Elsevier, vol. 2(4), pages 357-376.
    7. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    8. 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.
    9. 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.
    10. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    11. Kaneko, Mamoru & Nakamura, Kenjiro, 1979. "The Nash Social Welfare Function," Econometrica, Econometric Society, vol. 47(2), pages 423-435, March.
    12. Mamoru Kaneko, 1981. "On the Existence of an Optimal Income Tax Schedule," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(4), pages 633-642.
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    1. repec:thr:techub:10029:y:2022:i:1:p:271-284 is not listed on IDEAS
    2. Ruiz del Portal, X., 2010. "On the qualitative properties of the optimal income tax," Mathematical Social Sciences, Elsevier, vol. 59(3), pages 288-298, May.
    3. Dennis Ridley & Cartreal Davison, 2022. "Optimal Tax Rate for Maximal Revenue Generation," Technium Social Sciences Journal, Technium Science, vol. 29(1), pages 271-284, March.

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