The Optimal Income Tax: Restatement and Extensions

Stefan Homburg

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: The paper presents an axiomatic restatement of the standard approach to nonlinear income taxation. It assumes a finite number of taxpayers rather than an uncountable infinity. Analytical tools are developed which facilitate proving the existence of tax schedules that are continuous, differentiable almost everywhere and possess left- and right-derivatives at every point of non-differentiability. These tax schedules even become differentiable in the limit. Numerical examples are provided.

Keywords: Optimal income taxation; contract theory; incentives; welfare (search for similar items in EconPapers)
JEL-codes: D3 H2 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2002-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The Optimal Income Tax: Restatement and Extensions (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:han:dpaper:dp-252

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