TY - UNPB

T1 - The Theory of Optimal Taxation

T2 - New Developments and Policy Relevance

AU - Sørensen, Peter Birch

N1 - JEL classification: H21, H24, H25

PY - 2009

Y1 - 2009

N2 - The theory of optimal taxation has often been criticized for being of little practical policy relevance, due to a lack of robust theoretical results. This paper argues that recent advances in optimal tax theory has made that theory easier to apply and may help to explain some current trends in international tax policy. Covering the taxation of labour income and capital income as well as indirect taxation, the paper also illustrates how some of the key results in optimal tax theory may be derived in a simple, heuristic manner.

AB - The theory of optimal taxation has often been criticized for being of little practical policy relevance, due to a lack of robust theoretical results. This paper argues that recent advances in optimal tax theory has made that theory easier to apply and may help to explain some current trends in international tax policy. Covering the taxation of labour income and capital income as well as indirect taxation, the paper also illustrates how some of the key results in optimal tax theory may be derived in a simple, heuristic manner.

KW - Faculty of Social Sciences

KW - uniform taxation

KW - tax neutrality

M3 - Working paper

BT - The Theory of Optimal Taxation

PB - Economic Policy Research Unit. Department of Economics, University of Copenhagen

ER -