Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2005:41: Nonlinear Taxation and Punishment

Tommy Andersson ()
Additional contact information
Tommy Andersson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: The paper analyzes nonlinear tax schedules that are identified by maximizing a welfare function represented by a weighted summation of net utilities over a set of n>=3 differing individuals. We demonstrate that some of the feasible and Pareto efficient tax schedules that satisfy self-selection can only be identified by maximizing a welfare function of the above form if (at least) one of the individuals in the economy is assigned a negative weight.

Keywords: Nonlinear taxation; Pareto efficiency; self-selection; welfare weights

JEL-codes: D82; H21

10 pages, September 30, 2005

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Published as
Tommy Andersson, (2007), 'Nonlinear Taxation and Punishment', International Journal of Economic Theory, vol 3, no 1, pages 49-58

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