Weak redistribution and certainty equivalent domination

Stephane Gauthier and Guy Laroque
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Guy Laroque: Institut d'Études Politiques [IEP] - Paris, UCL - University College of London [London], Institute for Fiscal Studies

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Abstract: We assess optimal deterministic nonlinear income taxation in a Mirrlees economy with a continuum of risk‐averse agents whose utilities are quasilinear in labor. A weak redistribution motive makes random taxes more likely socially dominated by the deterministic policy where after‐tax income lotteries are replaced with their certainty equivalents.

Keywords: Asymmetric information; Certainty equivalent; Random taxes; Redistribution (search for similar items in EconPapers)
Date: 2024-06
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Published in Journal of Public Economic Theory, 2024, 26 (3), ⟨10.1111/jpet.12703⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-04811029

DOI: 10.1111/jpet.12703

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