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Weak redistribution and certainty equivalent domination

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  • Stéphane Gauthier
  • Guy Laroque

Abstract

We assess optimal deterministic nonlinear income taxation in a Mirrlees economy with a continuum of risk‐averse agents whose utilities are quasilinear in labor. A weak redistribution motive makes random taxes more likely socially dominated by the deterministic policy where after‐tax income lotteries are replaced with their certainty equivalents.

Suggested Citation

  • Stéphane Gauthier & Guy Laroque, 2024. "Weak redistribution and certainty equivalent domination," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 26(3), June.
    • Handle: RePEc:bla:jpbect:v:26:y:2024:i:3:n:e12703
    DOI: 10.1111/jpet.12703
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    References listed on IDEAS

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