Invited Article “THE OPTIMAL TAXATION”

Abstract

In the last decade, ever-growing attention has been paid to find the optimal situation in various economic fields. In what follows, this paper tries to show the simplest way of the optimal taxation, which will be able to minimize the total sacrifice, minimize the social welfare and maximize the total utility of the society as a whole, by focusing on the ability to pay approach.
The ability to pay calls for equal amounts of tax to be paid by taxpayers with equal ability to pay and for different amounts of taxes when such capacities differ. So, the ability to pay approach leads up to a special taxation of property-owners. Most of the authors of the country report are in favour of property taxation, it is generally found reasonable that, other things being equal, a person should be taxed heavier the larger is his (net) wealth.