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Title:Optimal income taxation, public goods provision and robust mechanism design PDF Logo
Authors:Bierbrauer, Felix
Issue Date:2008
Series/Report no.:Preprints of the Max Planck Institute for Research on Collective Goods 2008,31
Abstract:This paper extends the model of optimal income taxation due to Mirrlees (1971) and includes private information on public goods preferences. A mechanism design approach is used to establish the following result: If policies are required to be robustly implementable in the sense of Bergemann and Morris (2005), then the optimality conditions in the extended model with uncertainty about tax and expenditure policies, are the same as in the standard model of optimal income taxation. The paper provides a foundation for a widely used assumption in public nance, namely that individuals optimize their behaviour subject to a predetermined and commonly known tax system.
Subjects:Optimal Taxation
public goods provision
Revelation of Preferences
JEL:D71
D82
H21
H41
Document Type:Working Paper
Appears in Collections:Preprints of the Max Planck Institute for Research on Collective Goods

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