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In practical terms, this means a degree of progressivity in taxation and access to social benefits.
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Tax codes in all developed countries promote a substantial degree of progressivity.
And I don't have a precise model of the optimal degree of progressivity.
Hubbard and Judd (1986) find that an exemption and a higher marginal tax rate can in some cases improve efficiency relative to a proportional tax, so that some degree of progressivity may be desirable.
There is a generally acknowledged trade-off between the degree of progressivity and economic efficiency.
Most economists agree that the regressivity or progressivity of any specific tax is of minor economic importance; what matters is the degree of progressivity of the tax system as a whole.
The optimal degree of progressivity of income taxation has been, and still is, a live issue among academic researchers which point out challenging results in several directions.
Table 3 compares the revenue exposure measure to a set of counterfactuals that standardize in turn the average tax rate, the degree of progressivity, and the economic shock, replacing state-specific values of each component by national averages across the 48 states.
Moreover, whatever the optimal degree of progressivity was thirty years ago, the big increases in income inequality in the interim imply that it should be substantially greater today.
First, the optimal degree of progressivity is always positive.
At any rate, and for the parameter values considered, optimality requires some degree of progressivity.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com