Universität zu Köln

Bierbrauer, Felix ORCID: 0000-0003-3879-9607 (2011). On the optimality of optimal income taxation. J. Econ. Theory, 146 (5). S. 2105 - 2117. SAN DIEGO: ACADEMIC PRESS INC ELSEVIER SCIENCE. ISSN 1095-7235

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Abstract

The Mirrleesian model of income taxation restricts attention to simple allocation mechanism with no strategic interdependence, i.e., the optimal labor supply of any one individual does not depend on the labor supply of others. It has been argued by Piketty (2009) [121 that this restriction is substantial because more sophisticated mechanisms can reach first-best allocations that are out of reach with simple mechanisms. In this paper, we assess the validity of Piketty's critique in an independent private values model. As a main result, we show that the optimal sophisticated mechanism is a simple mechanism, or, equivalently, a Mirrleesian income tax system. (C) 2011 Elsevier Inc. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bierbrauer, Felix UNSPECIFIED orcid.org/0000-0003-3879-9607 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-489469
DOI:	10.1016/j.jet.2011.05.008
Journal or Publication Title:	J. Econ. Theory
Volume:	146
Number:	5
Page Range:	S. 2105 - 2117
Date:	2011
Publisher:	ACADEMIC PRESS INC ELSEVIER SCIENCE
Place of Publication:	SAN DIEGO
ISSN:	1095-7235
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Economics > Macroeconomic, Financial and Economic Policy > Professorship for Macroeconomic
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/48946