# Budget Balancedness and Optimal Income Taxation

*Marcus Berliant* () and
*Frank Page*

*Journal of Public Economic Theory*, 2006, vol. 8, issue 3, 409-451

**Abstract:**
We make two contributions to the theory of optimal income taxation. First, assuming conditions sufficient for existence of a Pareto optimal income tax and public goods mechanism, we show that if agents' preferences satisfy an extended notion of single crossing called capacity constrained single crossing, then there exists a Pareto optimal income tax and public goods mechanism that is budget balancing. Second, we show that, even without capacity constrained single crossing, existence of a budget balancing Pareto optimal income tax and public goods mechanism is guaranteed if the set of agent types contains no atoms. Copyright 2006 Blackwell Publishing, Inc..

**Date:** 2006

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**Related works:**

Working Paper: Budget Balancedness and Optimal Income Taxation (2004)

Working Paper: Budget Balancedness and Optimal Income Taxation (2003)

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**Persistent link:** https://EconPapers.repec.org/RePEc:bla:jpbect:v:8:y:2006:i:3:p:409-451

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