Efficiency Criteria, Income Taxation, and Heterogeneous Elasticities

• 成果类型: Article
• 署名作者: Becko, John Sturm; Sztutman, Andre
• 署名单位: Carnegie Mellon University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282; 1944-7981
• DOI: 10.1257/aer.20240919
• 发表日期: 2026-05
• 页码: 1876-1913
• 关键词: redistributive taxation; taxable income; Tax rates; selection

摘要

A common interpretation of Pareto-efficient policies is that, for some cardinal utility representations of preferences, they maximize utilitarian welfare. We show in the context of income taxation that such cardinalizations are often extreme, requiring unbounded curvature of utility with respect to consumption. Taxes can be justified as utilitarian without these extreme cardinalizations if and only if revenues are decreasing and concave in a class of narrowly targeted tax cuts. We reformulate this condition as a sufficient-statistics test. The test fails whenever elasticities of taxable income are too heterogeneous within some income level, as we argue is empirically likely.