According to the theory of optimal taxation the additional burden from a tax per additional revenue gained from the tax should be equal across all commodities, otherwise efficiency could be improved by changing the tax structure. In the case of Endmal, the marginal deadweight loss per dollar of revenue is higher on pencils than paper so the government should tax pencils less and paper more in order to increase efficiency. While strong administrative and political economy arguments in favor of uniform and neutral taxation remain, recent advances in optimal tax theory suggest that the information needed to implement the differentiated taxation prescribed by optimal tax theory may be easier to obtain than previously believed.

Define "optimal taxation" in other words.What are the advantages and disadvantages of using this concept for designing a tax system?Explain.Give specific examples using your reality and your desires for society.