2018 Graham Lecture - Using the Mirrlees Model to (try to) Understand Personal Income Taxation in Atlantic Canada
In this lecture, I wish to give a summary of optimal tax theory in the Mirrlees tradition and its more recent reformulation, which follows work by Diamond (1998). Then, I will make some rough comparisons between the marginal income tax rates in Atlantic Canada and those recommended by the theory. Finally, I will return to the original Mirrlees formulation to illustrate some other lessons from the optimal tax literature. These lessons help identify policies that are broadly complementary to income taxation insofar as they help to bring about the redistributive goals that are front-and-center in the motivation for progressive income tax schemes.
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