Optimal Taxation Is Not Necessarily Progressive

From America the Progressive by Nick Schulz of AEI.

"The Joint Committee on Taxation joins the OECD and others in pointing out just how progressive the U.S. tax system is. Now if we can just get policy makers to focus on “The Trouble with Taxing Those at the Top“:

In 1971, James A. Mirrlees, the 1996 Nobel laureate in economics, made the first computations of the optimal income tax schedule—the schedule that imposes the least total burden on society—under various assumptions about these factors. His work has spawned a vast literature on optimal income taxation.

The early studies by Mirrlees and others generally concluded that rates should be relatively low at the top, a result that Mirrlees had not expected.[15] These researchers found that the desirable tax schedule either had marginal tax rates that fell as income rose or had marginal rates with an inverted U shape, rising as income moved from low to middle, but falling as incomes moved from middle to high.

They continued to obtain these results even when they assumed that the government’s sole goal was to make the worst-off person in society as well-off as possible. This maxi-min goal puts maximum weight on helping the poor. Mirrlees and others found that, although some taxpayers should then face high marginal tax rates to finance larger payments to the poor, those at the top should not."