Budget Balancedness and Optimal Income Taxation
Marcus Berliant () and
Public Economics from EconWPA
We make two main contributions to the theory of optimal income taxation. First, assuming conditions sufficient for existence of a Pareto optimal income tax and public goods mechanism, we show that if agents’ preferences satisfy an extended notion of single crossing called capacity constrained single crossing, then there exists a Pareto optimal income tax and public goods mechanism that is budget balancing. Second, we show that, even without capacity constrained single crossing, existence of a budget balancing, Pareto optimal income tax and public goods mechanism is guaranteed if the set of agent types contains no atoms.
Keywords: Optimal Income Taxation; Public Goods; Budget Balancing; Single Crossing; Nonatomic Economy; Atomless Economy (search for similar items in EconPapers)
JEL-codes: H21 H41 H62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Note: Type of Document - pdf; pages: 44
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Journal Article: Budget Balancedness and Optimal Income Taxation (2006)
Working Paper: Budget Balancedness and Optimal Income Taxation (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwppe:0407016
Access Statistics for this paper
More papers in Public Economics from EconWPA
Series data maintained by EconWPA ().