Responsibility sensitive egalitarianism and optimal linear income taxation

We compute optimal linear taxes on labor income with quasilinear preferences between income and labor. Agents differ in their productivity and in their taste for leisure. A responsibility sensitive egalitarian wants to compensate for the former differences but not for the latter. This intuition is captured by a social planner that wants to equalize opportunities for subjective utility along the lines of the criteria proposed by Roemer and Van de gaer, and by a social planner evaluating social states based on an advantage function representing reference preferences. Our theoretical results are illustrated with empirical data for Belgium.

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