Editing Tax (section)

===Optimal===
{{Main|Optimal tax}}

Most governments take revenue that exceeds that which can be provided by non-distortionary taxes or through taxes that give a double dividend. Optimal taxation theory is the branch of economics that considers how taxes can be structured to give the least deadweight costs, or to give the best outcomes in terms of [[social welfare]]. The [[Ramsey problem]] deals with minimizing deadweight costs. Because deadweight costs are related to the [[elasticity (economics)|elasticity]] of supply and demand for a good, it follows that putting the highest tax rates on the goods for which there are most inelastic supply and demand will result in the least overall deadweight costs. Some economists sought to integrate optimal tax theory with the [[social welfare function]], which is the economic expression of the idea that equality is valuable to a greater or lesser extent. If individuals experience [[diminishing returns]] from income, then the optimum distribution of income for society involves a progressive income tax. [[James Mirrlees|Mirrlees optimal income tax]] is a detailed theoretical model of the optimum progressive income tax along these lines. Over the last years the validity of the theory of optimal taxation was discussed by multiple political economists.<ref>{{cite web |url=http://wordsofliberty.net |title=Libertarian & Conservative News |publisher=Words of Liberty |access-date=22 January 2013 |url-status=dead |archive-url=https://web.archive.org/web/20130122183637/http://wordsofliberty.net/ |archive-date=22 January 2013 }}</ref>