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Title:Income taxation and the choice of the tax rate schedule: Sacrifice principles and "just" tax rates PDF Logo
Authors:Petersen, Hans-Georg
Issue Date:2011
Series/Report no.:Finanzwissenschaftliche Diskussionsbeiträge 62
Abstract:In the history of economic thoughts the problem of a just tax rate structure has played an important role. The paper reconsiders the discussions of the last two centuries and sheds additional light on the concrete tax schedules using the more recent methods of tax theory. Even if the substitution effects which play an important role in the theory of optimal taxation are neglected, the slope in the diminishing marginal utility of income causes tax rate structures reaching from accelerated progression to delayed regression. Interestingly the principle of equal relative sacrifice combined with a Bernoulli utility function yields a delayed progression, which is connected with a negative income tax.
Subjects:income tax
sacrifice principle
tax rate schedule
cardinal utility function
JEL:H21
H24
D31
B13
Persistent Identifier of the first edition:urn:nbn:de:kobv:517-opus-53924
Document Type:Working Paper
Appears in Collections:Finanzwissenschaftliche Diskussionsbeiträge, Universität Potsdam

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