10 Facts About Optimal tax

The social welfare function used is typically a function of individuals' utilities, most commonly some form of utilitarian function, so the tax system is chosen to maximise the aggregate of individual utilities.

The US tax code imposes less tax on couples filing joint returns and on heads of households than it does on taxpayers that are single, and provides a credit reducing the tax bills of those supporting children.

Optimal tax wanted to confront the problem of how to adjust consumption tax rates, under specified constraints, so that the reduction of utility is at a minimum.

Optimal tax argues that any future tax literature in normative theory needs to focus less on consumer preferences and more on tax-collecting technology and the areas of the economy that affect tax collection.

Optimal tax proposed a general-equilibrium model, in which he analyzed a two-sector economy.

Optimal tax presented a method on how to reflect the net effect of the changes ro corporate tax rates on individual tax returns by focusing on the difference between real and nominal capital income.

Optimal tax recognizes that monetary policy is important to determine the response of nominal prices under a national sales tax and points to possible differences in taxes applied at the local level as to taxes applied at a national level.

Optimal tax's study coincides with the original hypothesis that retail sales taxes are fully shifted to retail prices.

Theory of optimal capital income tax considers the capital income as future consumption.

However, land value Optimal tax is considered progressive, because the ownership of land values is more concentrated than other sources of revenue, such as personal income or spending.