NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Theory of Excess Burden and Optimal Taxation

Alan J. Auerbach

NBER Working Paper No. 1025 (Also Reprint No. r0686)
Issued in November 1982
NBER Program(s):   PE

The purpose of this paper is to present the chronological development ofthe concept of excess burden and the related study of optimal tax theory. A main objective of this exercise is to uncover the interrelationships among various apparently distinct results, so as to bring out the basic structure of the entire problem.The paper includes a discussion of various measures of excess burden,focusing on issues of approximation, informational requirements, aggregation over individuals, and the effects of technology. Included in the presentation of optimal tax theory is a section on tax reform, as well as an application of the theory to the case where uncertainty is present.

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Document Object Identifier (DOI): 10.3386/w1025

Published: in "Handbook of Public Economics," vol 1, A. Auerbach and M. Feldstein, eds. Amsterdam: Elsevier Science Publishers B.V., 1985.

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