Compare the effects of a proportional income tax and a progressive flat-rate income tax; that is, one

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Compare the effects of a proportional income tax and a progressive flat-rate income tax; that is, one in which there is a lump-sum grant from the government of, say, $3000, and then a constant marginal tax rate on all income. In particular, show that if the two taxes raise the same revenue, and all individuals have the same income, utility will be higher with the proportional tax.

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Economics Of The Public Sector

ISBN: 9780393925227

4th Edition

Authors: Joseph E. Stiglitz, Jay K. Rosengard

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