Working Paper Series, Department of Economics, Uppsala University
No 2002:19:
Optimal Utilitarian Taxation and Horizontal Equity
Henrik Jordahl and Luca Micheletto ()
Abstract: We impose a horizontal equity restriction on the problem
of finding the optimal utilitarian tax mix. The horizontal equity
constraint requires that individuals with the same ability have to pay the
same amount of taxes regardless of their preferences for leisure. Contrary
to normal findings, we find that a good that is complementary to leisure
need not be discouraged by the tax system, and that a good that normally
should be discouraged by the tax system need not be taxed at a positive
rate even if the economy is composed of only two private commodities plus
leisure. Similarly, the marginal effective tax rate need not be equal to
zero at the top when the tax mix obeys the horizontal equity constraint.
Keywords: Horizontal equity; optimal taxation; heterogeneous preferences; utilitarianism; (follow links to similar papers)
JEL-Codes: D63; H21; H24; (follow links to similar papers)
45 pages, November 26, 2002
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
wp2002_19.pdf 
Download Statistics
- This paper is published as:
-
Jordahl, Henrik and Luca Micheletto, (2005), 'Optimal Utilitarian Taxation and Horizontal Equity', Journal of Public Economic Theory, Vol. 7, No. 4, pages 681-708
Questions (including download problems) about the papers in this series should be directed to Katarina Grönvall ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
