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A Contribution to the Theory of Optimal Utilitarian Income Taxation

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  • Martin Hellwig

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

The paper provides a new formulation of the Mirrlees-Seade theorem on the positivity of the optimal marginal income tax, under weaker assumptions and in a more general model. The formulation of the theorem is independent of whether the model involves finitely many types or a continuous type distribution. The formal argument makes the underlying logic transparent, relating the mathematics to the economics and showing precisely how each assumption enters the analysis.

Suggested Citation

  • Martin Hellwig, 2007. "A Contribution to the Theory of Optimal Utilitarian Income Taxation," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2007_2, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2007_2
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    References listed on IDEAS

    as
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    16. repec:bla:scandj:v:85:y:1983:i:3:p:359-71 is not listed on IDEAS
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    More about this item

    Keywords

    Optimal Income Taxation; Utilitarian Welfare Maximization; Redistribution;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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