01789cam a22002417 4500001000600000003000500006005001700011008004100028100002000069245009900089260006600188490004100254500001600295520079200311530006101103538007201164538003601236690008401272710004201356830007601398856003701474856003601511w7628NBER20170124111136.0170124s2000 mau||||fs|||| 000 0 eng d1 aSaez, Emmanuel.10aUsing Elasticities to Derive Optimal Income Tax Ratesh[electronic resource] /cEmmanuel Saez. aCambridge, Mass.bNational Bureau of Economic Researchc2000.1 aNBER working paper seriesvno. w7628 aMarch 2000.3 aThis paper derives optimal income tax formulas using compensated and uncompensated elasticities of earnings with respect to tax rates. A simple formula for the high income optimal tax rate is obtained as a function of these elasticities and the thickness of the top tail of the income distribution. In the general non-linear income tax problem, this method using elasticities shows precisely how the different economic effects come into play and which are the key relevant parameters in the optimal income tax formulas of Mirrlees. The optimal non-linear tax rate formulas are expressed in terms of elasticities and the shape of the income distribution. These formulas are implemented numerically using empirical earnings distributions and a range of realistic elasticity parameters. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aH21 - Efficiency • Optimal Taxation2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w7628.4 uhttp://www.nber.org/papers/w762841uhttp://dx.doi.org/10.3386/w7628