Arbeitspapier

Optimal Nonlinear Income Taxation for Reduction of Envy

This paper examines the optimal nonlinear income taxation problem based on Chaudhuri (1986) and Diamantaras and Thomson's (1990) λ-equitability in a two-class economy. An allocation is λ-equitable if no agent envies a proportion λ of the bundle of any other agent. We examine the properties of Pareto undominated allocations for various λ-equitability requirements. When there is one output, the marginal income tax rate can increase only if (but not if) leisure is a luxury. In a multi-commodity model with commodity taxes, the goods preferred by the low skilled agent and/or of high Hicksian elasticities are taxed more heavily.

Language
Englisch

Bibliographic citation
Series: Queen's Economics Department Working Paper ; No. 991

Classification
Wirtschaft
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Taxation and Subsidies: Efficiency; Optimal Taxation
Subject
Income Taxation
Envy

Event
Geistige Schöpfung
(who)
Nishimura, Yukihiro
Event
Veröffentlichung
(who)
Queen's University, Department of Economics
(where)
Kingston (Ontario)
(when)
2000

Handle
Last update
20.09.2024, 8:23 AM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Nishimura, Yukihiro
  • Queen's University, Department of Economics

Time of origin

  • 2000

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