Optimum Taxation of Each Year's Income

Thomas Gaube

Journal of Public Economic Theory, 2007, vol. 9, issue 1, 127-150

Abstract: In this paper, a two‐type, two‐period model of optimum income taxation is investigated. I assume full commitment and that current income determines the agents' tax burden in each period. It is shown that such a tax system does not allow one to implement the optimal long‐term tax contract and that it implies positive marginal tax rates at the upper end of the income distribution.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:9:y:2007:i:1:p:127-150

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