Saturday, March 24, 2007
Martin F. Hellwig (Max Planck Institute) has posted A Contribution to the Theory of Optimal Utilitarian Income Taxation on SSRN. Here is the abstract:
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.