Gini and Optimal Income Taxation by Rank

• 成果类型: Article
• 署名作者: Simula, Laurent; Trannoy, Alain
• 署名单位: Ecole Normale Superieure de Lyon (ENS de LYON); Aix-Marseille Universite; Centre National de la Recherche Scientifique (CNRS)
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20200272
• 发表日期: 2022
• 页码: 352-379
• 关键词: marginal tax rates; EQUALITY

摘要

We solve the nonlinear income tax program for rank-dependent social welfare functions, expressing the trade-off between size and inequality using the Gini and related families of positional indices. Absent bunching, ranks in the actual and optimal allocations are invariant. Exploiting this feature, we provide new, simple, and intuitive tax formulas for both the quasilinear and additive cases and new comparative static results. Our approach makes insights from optimal taxation more widely accessible. In some of our simulations the actual US tax policy is close to being optimal-except at the top, where optimal rates are much higher than in actuality.