Optimal Linear Taxation with Stochastic Incomes

摘要: This paper characterizes an optimal linear income tax system in economy where incomes are partly random as being composed of three distinct elements: redistribution, insurance provision, and labor disincentives. The response the rate to changes degree uncertainty is examined for both general situation some special cases that analytically tractable. intuitive result increasing with increases holds a number cases, but counterexamples shown exist opposite holds.