Optimal income taxation: and ordinal approach

Marc Fleurbaey and Francois Maniquet

No 1998065, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In a model where agents have unequal production skills and different preferences, we build social welfare functions which rely only on ordinal non-comparable information on individual preferences. Social welfare functions are required to satisfy properties of compensation for inequalities in skills, and responsibility for preferences. Then, assuming skills and preferences are unobservable, we use these social welfare functions to design optimal income tax schemes. We obtain ethical foundations for, among others, a maximized minimal income, a zero marginal tax rate for low incomes, and increasing marginal tax rates.

Date: 1998-09-23
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Citations: View citations in EconPapers (6)

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Working Paper: Optimal income taxation: An ordinal approach (1999)
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