Most analyses of optimal income taxation make restrictive technical
assumptions on preferences (such as single-crossing) and only derive properties
of welfare-maximizing tax schedules. Here, for an economy with any finite
numbers of groups and commodities, Pareto efficient tax structures are
described assuming only continuity and monotonicity of preferences. Most
results follow directly from a property of self-selection: at an optimum, one
group will never envy the bundle of another group which pays a larger total
tax. The bundle of a group paying the largest total tax is undistorted.
Assuming normality, undistorted outcomes for a group form a connected segment
on the constrained utility possibility frontier. The tax structure at
distorted outcomes is also described.
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