A ‘Rights-Based’ Approach to Optimal Tax Policy

This paper derives the tax system and size of government implied by principles of economic efficiency and aversion to the violation of individual rights. The optimal policy equalizes the gains individuals obtain from the governmental activity, relative to what they have a right to in its absence. Optimal taxes are progressive. However, because industrious individuals would fare well either way there will be limits to how much redistribution is recommended by the optimal policy