Optimal Income Taxation With Quasi-linear Preferences Revisited

Robin Boadway, Katherine Cuff and Maurice Marchand
Additional contact information
Maurice Marchand: Universite Catholique de Louvain

No 984, Working Paper from Economics Department, Queen's University

Abstract: With quasi-linear in leisure preferences, closed-form solutions for the marginal tax rates and the marginal utility of consumption under utilitarian and maxi-min objectives depend only on the skill distribution. Bunching induced by binding second-order incentive conditions also depends only on the distribution, but does not affect solutions in the non-bunched range. These are affected if bunching is caused by binding non-negative income constraints. Specific skill distributions are considered and it shown that the pattern of marginal tax rates depend critically on whether or not the skill distribution is truncated at the upper end.

Keywords: Optimal Income Tax; Quasi-Linear Preferences (search for similar items in EconPapers)
JEL-codes: H21 H23 (search for similar items in EconPapers)
Pages: 33 pages
Date: 1999-04
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Citations: View citations in EconPapers (23)

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https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_984.pdf First version 1999 (application/pdf)

Related works:
Journal Article: Optimal Income Taxation With Quasi‐Linear Preferences Revisited (2000)
Working Paper: Optimal income taxation with quasi-linear preferences revisited (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:984

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