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Optimal Non-Welfarist Income Taxation for Inequality and Polarization Reduction
1 : Department of Economics - University of Verona
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Website
Via dell'Artigliere 8, 37129 Verona -
Italy
2 : Department of Economics - University of Verona
We adopt a non-welfarist approach to characterize the property of an optimal piecewise linear tax system. We consider inequality and income polarization reduction objectives and we formalize them through the use of a rank-dependent social evaluation function de
ned on net incomes. In the case of inequality concerns the optimal tax system is mainly convex exhibiting increasing marginal tax rates. In case of polarization concerns the optimal tax scheme is non-convex with a reduced marginal tax rate for the upper income bracket.
Keywords: Non welfarism, Rank-dependent social evaluation function, Optimal Taxation, Inequality, Polarization.
JEL classi
cation: D31, D63, H21.
