TY - JOUR
T1 - On the shape of optimal tax schedule
AU - SEADE, Jesús
N1 - This paper is part of a D.Phil. thesis (Oxford), for which Professor J.A. Mirrlees provided most helpful supervision. My special thanks are due to him. I am also indebted to Professor A.B. Atkinson, J.S. Flemming, who also supervised part of my work, and Dr. N.H. Stern, for very valuable suggestions, as well as to the members of seminars at Maryland, Warwick and Nuffield College, Oxford for their useful comments. The paper was presented at the 1976 European Meeting of the Econometric Society (Helsinki). Financial support from the Ford Foundation is gratefully acknowledged, as is assistance from CONACYT (Mexico).
PY - 1977/1/1
Y1 - 1977/1/1
N2 - Take consumers to be described by a parameter h (skill, needs, etc.) with utilities defined on N commodities, including factor supplies. Our main result is that if in the optimum each component of this consumption vector is bounded and bounded away from zero over the population, each marginal tax must be zero at both ends of the corresponding tax schedule. For the income tax case, it is also shown that if the marginal tax rate at the top of the scale is positive, one can construct another tax schedule which is strongly Pareto superior (dominating the first one at all or most income levels), requirements of information being low.
AB - Take consumers to be described by a parameter h (skill, needs, etc.) with utilities defined on N commodities, including factor supplies. Our main result is that if in the optimum each component of this consumption vector is bounded and bounded away from zero over the population, each marginal tax must be zero at both ends of the corresponding tax schedule. For the income tax case, it is also shown that if the marginal tax rate at the top of the scale is positive, one can construct another tax schedule which is strongly Pareto superior (dominating the first one at all or most income levels), requirements of information being low.
UR - http://commons.ln.edu.hk/sw_master/3644
UR - http://www.scopus.com/inward/record.url?scp=0001319780&partnerID=8YFLogxK
U2 - 10.1016/0047-2727(77)90046-9
DO - 10.1016/0047-2727(77)90046-9
M3 - Journal Article (refereed)
SN - 0047-2727
VL - 7
SP - 203
EP - 235
JO - Journal of Public Economics
JF - Journal of Public Economics
IS - 2
ER -