60 Pages Posted: 7 Mar 2007
Date Written: February 2007
The paper provides a new formulation of the Mirrlees-Seade theorem on the positivity of the optimal marginal income tax, under weaker assumptions and in a more general model. The formulation of the theorem is independent of whether the model involves finitely many types or a continuous type distribution. The formal argument makes the underlying logic transparent, relating the mathematics to the economics and showing precisely how each assumption enters the analysis.
Notes: A previous version of this paper can be found at: http://ssrn.com/abstract=869204
Keywords: Optimal Income Taxation, Utilitarian Welfare Maximization, Redistribution
JEL Classification: D63, H21
Suggested Citation: Suggested Citation
Hellwig, Martin F., A Contribution to the Theory of Optimal Utilitarian Income Taxation (February 2007). MPI Collective Goods Preprint No. 2007/2. Available at SSRN: https://ssrn.com/abstract=968643 or http://dx.doi.org/10.2139/ssrn.968643