Optimal income taxation theory and principles of fairness

Marc Fleurbaey and Francois Maniquet

No 2017012, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The achievements and limitations of the classical theory of optimal labor-income taxation based on social welfare functions are now well known. Even though utili-tarianism still dominates public economics, recent interest has arisen for broadening the normative approach and making room for fairness principles such as desert or responsibility. Fairness principles sometimes provide immediate recommendations about the relative weights to assign to various income ranges, but in general require a careful choice of utility representations embodying the relevant interpersonal com-parisons. The main message of this paper is that the traditional tool of welfare economics, the social welfare function framework, is exible enough to incorporate many approaches, from egalitarianism to libertarianism.

Keywords: Optimal taxation; fair social orderings (search for similar items in EconPapers)
JEL-codes: D63 H21 (search for similar items in EconPapers)
Date: 2017-03-29
New Economics Papers: this item is included in nep-pbe and nep-pub
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Related works:
Journal Article: Optimal Income Taxation Theory and Principles of Fairness (2018)
Working Paper: Optimal income taxation theory and principles of fairness (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2017012

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