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Optimal labor income taxation under maximin: an upper bound

Jacquet, Laurence
Working paper
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URI
http://hdl.handle.net/11250/163202
Date
2010-02
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  • Discussion papers (SAM) [586]
Abstract
This paper assumes the standard optimal income tax model of Mirrlees (Review of Economic

Studies, 1971). It gives fairly mild conditions under which the optimal nonlinear labor income tax

profile derived under maximin has higher marginal tax rates than the ones derived with welfarist

criteria that sum over the population any concave transformation of individual utilities. This strict

dominance result is always valid close to the bounds of the skill distribution and almost everywhere

(except at the upper bound) when quasilinear-in-consumption preferences are assumed.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2010:5

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