Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/189281 
Year of Publication: 
2000
Series/Report no.: 
Queen's Economics Department Working Paper No. 991
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
This paper examines the optimal nonlinear income taxation problem based on Chaudhuri (1986) and Diamantaras and Thomson's (1990) λ-equitability in a two-class economy. An allocation is λ-equitable if no agent envies a proportion λ of the bundle of any other agent. We examine the properties of Pareto undominated allocations for various λ-equitability requirements. When there is one output, the marginal income tax rate can increase only if (but not if) leisure is a luxury. In a multi-commodity model with commodity taxes, the goods preferred by the low skilled agent and/or of high Hicksian elasticities are taxed more heavily.
Subjects: 
Income Taxation
Envy
JEL: 
D63
H21
Document Type: 
Working Paper

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