Mirrleesian optimal taxation: Review of the static and dynamic framework

Josheski, Dushko and Boskov, Tatjana (2022) Mirrleesian optimal taxation: Review of the static and dynamic framework. Economic Development, 24 (3). pp. 120-138. ISSN 1409-7893

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Abstract

The subject of this paper is modern tax theory. Namely, it is static taxation theory with issues such as: income effects, inverse elasticity rule, and linear and non-linear tax formulas. The issue of heterogeneity is present in the dynamic taxation models and inverse Euler equation where savings affect incentive to work, so government needs to discourage savings to prevent the flowing deviation by highly skilled workers to save more today and work less tomorrow. Other important implication for fiscal policy is that if your labor income is below average, your capital tax is positive. Numerical results at the end have confirmed results from theoretical models in optimal taxation outlined in this paper.

Item Type:	Article
Subjects:	Social Sciences > Economics and business
Divisions:	Faculty of Tourism and Business Logistics
Depositing User:	Dusko Josevski
Date Deposited:	30 Nov 2022 11:22
Last Modified:	30 Nov 2022 11:22
URI:	https://eprints.ugd.edu.mk/id/eprint/30573

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