Optimal Redistributive Taxation by Matti TuomalaOptimal Redistributive Taxation by Matti Tuomala

Optimal Redistributive Taxation

byMatti Tuomala

Hardcover | February 20, 2016

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Tax systems raise large amounts of revenue for funding public sector's activities, and tax/transfer policy, together with public provision of education, health care, and social services, play a crucial role in treating the symptoms and the causes of poverty. The normative analysis is crucialfor tax/transfer design because it makes it possible to assess separately how changes in the redistributive criterion of the government, and changes in the size of the behavioural responses to taxes and transfers, affect the optimal tax/transfer system. Optimal tax theory provides a way of thinkingrigorously about these trade-offs.Written primarily for graduate students and researchers, this volume is intended as a textbook and research monograph, connecting optimal tax theory to tax policy. It comments on some policy recommendations of the Mirrlees Review, and builds on the authors work on public economics, optimal taxtheory, behavioural public economics, and income inequality. The book explains in depth the Mirrlees model and presents various extensions of it. The first set of extensions considers changing the preferences for consumption and work: behavioural-economic modifications (such as positional externalities, prospect theory, paternalism, myopic behaviour and habitformation) but also heterogeneous work preferences (besides differences in earnings ability). The second set of modifications concerns the objective of the government. The book explains the differences in optimal redistributive tax systems when governments - instead of maximising social welfare -minimise poverty or maximise social welfare based on rank order or charitable conservatism social welfare functions. The third set of extensions considers extending the Mirrlees income tax framework to allow for differential commodity taxes, capital income taxation, public goods provision, publicprovision of private goods, and taxation commodities that generate externalities. The fourth set of extensions considers incorporating a number of important real-word extensions such as tagging of tax schedules to certain groups of tax payers. In all extensions, the book illustrates the mainmechanisms using advanced numerical simulations.
Matti Tuomala is Professor at University of Tampere, Finland. Being a student of Nobel-prize winner James Mirrlees, Matti Tuomala has devoted large parts of his academic career to extending the Mirrlees (1971) framework of optimal non-linear income taxation. He published a book on this topic in 1990 entitled Optimal Income Tax and Redi...
Title:Optimal Redistributive TaxationFormat:HardcoverDimensions:512 pages, 9.69 × 7.44 × 1.32 inPublished:February 20, 2016Publisher:Oxford University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0198753411

ISBN - 13:9780198753414

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Table of Contents

1. Introduction2. Optimal Labour Income Taxation: Background3. Optimal Linear Income Taxation4. The Optimal Nonlinear Income Tax Problem5. The Shape of Optimal Income Tax Schedule: Numerical Simulations with Income Effects6. Optimal Income Tax/Transfer Program in the Extensive Margin Model7. Relativity and Optimal Labour Income Taxation8. Optimal Income Taxation and Tagging9. Optimal Income Taxes/Transfers and Non-Welfarist Social Objectives10. Heterogeneous Work Preferences and Optimal Redistribution11. Income Uncertainty and Optimal Income Taxation12. Optimal Mixed Taxation13. Public Provision and Optimal Taxation14. Optimal Capital Income Taxation15. Discussion and Conclusions