Inherent Inequality and the Optimal Graduation of Marginal Tax Rates

摘要: In most countries, marginal tax rates increase with income. This is at variance the results of optimal income taxation literature, whose numerical calculations have established presumption that should decline Have existing therefore, a observed pattern suboptimal? The object this paper to attempt answer question. followed Mirrlees's (1971) pioneering contribution tried many variations on his basic parametrisation, including different preference structures and functional forms. However, so far as we are aware, reported maintain assumption log-normal distribution "abilities" or "Wages" standard deviation logs 0.39. Mirrlees himself appealed work Lydall (1969) for figure, but it has become "industry standard". We show in departures from assumption, particular increases "inherent" inequality, can alter qualitative dramatically. Contrary currently available calculations, graduation indeed be such majority population, which consistent pattern, there continues exist significant range top where which, course, counter pattern.