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Optimal Nonlinear Income Taxes with Compensation

Author

Listed:
  • Laurence Jacquet
  • Robin Boadway, Craig Brett

    (Université de Cergy-Pontoise, THEMA)

Abstract

This paper proposes a new objective function as a compromise between principles of compensation and responsibility in the design of optimal income taxes. It characterizes both first-best and second-best tax schedules. Results are interpreted in terms of both the model’s primitives and taxable income elasticities.

Suggested Citation

  • Laurence Jacquet & Robin Boadway, Craig Brett, 2015. "Optimal Nonlinear Income Taxes with Compensation," THEMA Working Papers 2015-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2015-15
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    File URL: http://www.u-cergy.fr/thema/repec/2015-15.pdf
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    References listed on IDEAS

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    7. Thomas Piketty & Emmanuel Saez, 2012. "Optimal Labor Income Taxation," NBER Working Papers 18521, National Bureau of Economic Research, Inc.
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    9. Robin Boadway & Maurice Marchand & Pierre Pestieau & María Del Mar Racionero, 2002. "Optimal Redistribution with Heterogeneous Preferences for Leisure," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(4), pages 475-498, October.
    10. Brett, Craig & Weymark, John A., 2016. "Voting over selfishly optimal nonlinear income tax schedules with a minimum-utility constraint," Journal of Mathematical Economics, Elsevier, vol. 67(C), pages 18-31.
    11. Jacquet, Laurence & Lehmann, Etienne & Van der Linden, Bruno, 2013. "Optimal redistributive taxation with both extensive and intensive responses," Journal of Economic Theory, Elsevier, vol. 148(5), pages 1770-1805.
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    Cited by:

    1. Alain Trannoy, 2019. "Talent, equality of opportunity and optimal non-linear income tax," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(1), pages 5-28, March.
    2. Brett, Craig & Weymark, John A., 2016. "Voting over selfishly optimal nonlinear income tax schedules with a minimum-utility constraint," Journal of Mathematical Economics, Elsevier, vol. 67(C), pages 18-31.

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    More about this item

    Keywords

    optimal income taxation; optimal control; responsibility;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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