On the sign of the optimum marginal income tax
Document Type
Journal article
Source Publication
Review of Economic Studies
Publication Date
10-1-1982
Volume
49
Issue
4
First Page
637
Last Page
643
Abstract
This paper studies a central aspect of optimal income taxation as modelled in Mirrlees' original paper on the topic (identical leisure/consumption preferences, qualitatively homogeneous "skills" in production), namely, whether given concave utilitarianism alone the optimal marginal income tax will be non-negative. A well-known positive answer to this question (in weak inequality form) was given in the said paper which, however, we show requires additive separability of individual utility (in the ordinal and cardinal senses). Our main result here is to derive the required (strict) positivity of the marginal tax under weak conditions, slightly wider than noninferiority of consumption and leisure, with preferences otherwise arbitrary.
DOI
10.2307/2297292
Print ISSN
00346527
E-ISSN
1467937X
Publisher Statement
Copyright © 1982 The Society for Economic Analysis Limited
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Seade, J. (1982). On the sign of the optimum marginal income tax. Review of Economic Studies, 49(4), 637-643. doi: 10.2307/2297292