The Resource Optimal taxation and the Le Chatelier principle, Peter Diamond [and] James Mirrlees., (electronic resource)

Optimal taxation and the Le Chatelier principle, Peter Diamond [and] James Mirrlees., (electronic resource)

Label
Optimal taxation and the Le Chatelier principle
Title
Optimal taxation and the Le Chatelier principle
Statement of responsibility
Peter Diamond [and] James Mirrlees.
Creator
Contributor
Provider
Language
eng
Summary
It is a natural presumption that there should be less distorting taxation when there are more decisions based on the prices distorted by taxation. This note shows the need for an additional assumption in order to reach the conclusion. We consider a competitive model with one consumption good, labor, and human capital. We contrast the situation where human capital is chosen with that where the human capital level is a parameter, using the Le Chatelier principle. While the Le Chatelier principle signs the difference in substitution effects between the two models, there are other terms that are relevant as well. The assumption that the income derivative of human capital is small relative to its substitution effect is sufficient to sign the response of social welfare to wage taxation with fixed human capital at the value of the optimal wage tax with human capital chosen, thereby giving the presumptive result. Keywords: Taxation (or Optimal Taxation), Le Chatelier Principle, Human Capital. JEL Classification: H21
Member of
Additional physical form
Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.
Cataloging source
MYG
http://library.link/vocab/creatorName
Diamond, Peter A
Illustrations
illustrations
Index
no index present
Literary form
non fiction
Nature of contents
  • bibliography
  • technical reports
http://library.link/vocab/relatedWorkOrContributorName
  • Mirrlees, James A
  • Massachusetts Institute of Technology
  • Internet Archive
Series statement
Working paper series / Massachusetts Institute of Technology, Dept. of Economics
Series volume
working paper 02-30
Label
Optimal taxation and the Le Chatelier principle, Peter Diamond [and] James Mirrlees., (electronic resource)
Instantiates
Publication
Note
  • Title from cover
  • "September 2002."
Bibliography note
Includes bibliographical references (p. 12)
Dimensions
28 cm.
Extent
12 p.
Other physical details
ill.
Specific material designation
remote
System control number
  • (OCoLC)51807224
  • (CaSfIA)optimaltaxationl00diam
  • (CaSfIA)001138690
Label
Optimal taxation and the Le Chatelier principle, Peter Diamond [and] James Mirrlees., (electronic resource)
Publication
Note
  • Title from cover
  • "September 2002."
Bibliography note
Includes bibliographical references (p. 12)
Dimensions
28 cm.
Extent
12 p.
Other physical details
ill.
Specific material designation
remote
System control number
  • (OCoLC)51807224
  • (CaSfIA)optimaltaxationl00diam
  • (CaSfIA)001138690

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