Program > Program by speaker > Zambrano Eduardo

This paper derives the tax system implied a combination of liberal and libertarian ‘unfairness aversion' principles, together with economic efficiency. The optimal policy equalizes the gains individuals obtain from the governmental activity, relative to how they would fare in its absence. Because industrious individuals would fare well either way there will be limits to how much redistribution is recommended by the optimal policy. To illustrate this conclusion I investigate the tax system this approach would recommend for the United States. The resulting “fair-and-efficient” policies would redistribute income via the adoption of a substantial tax credit per household while keeping marginal tax rates constant.