| Abstract: |
The aim of this work is to introduce basic ideas standing behind optimal income and commodity taxation. Concerning nonlinear income tax, we concluded that introduction of zero marginal income tax rate for the highest earner leads to optimal solution but it didn’t answer the question how should the tax rates look like throughout the income distribution.. Optimal nonlinear tax could be well approximated to linear rate which comprises significant simplifications. Optimal commodity taxation happens to be different for complements and substitutes to leisure. |
