Comparative Static Properties of Optimal Nonlinear Income Taxes
Comparative static properties of optimal nonlinear income taxes are obtained for a finite population version o f the Mirrlees income-tax model with a weighted utilitarian social we lfare function and quasilinear preferences. The parameters which are varied are the weights in the welfare function, the slope of the prod uction constraint, and a parameter in the utility function. The endog enous variables are the consumers' consumption levels, pretax incomes (labor supplies in efficiency units), utility levels, and marginal t ax rates.