01617cas a2200241 a 4500 AALejournalIMF000879 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451848038 1018-5941 BD-DhAAL BD-DhAAL Zee, Howell. Inequality and Optimal Redistributive Tax and Transfer Policies / Howell Zee. Washington, D.C. : International Monetary Fund, 1999. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper explores the revenue-raising aspect of progressive taxation and derives, on the basis of a simple model, the optimal degree of tax progressivity where the tax revenue is used exclusively to finance (perfectly) targeted transfers to the poor. The paper shows that not only would it be optimal to finance the targeted transfers with progressive taxation, but that the optimal progressivity increases unambiguously with growing income inequality. This conclusion holds up under different assumptions about the efficiency cost of taxation and society's aversion to inequality. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1999/060 Full text available on IMF http://elibrary.imf.org/view/journals/001/1999/060/001.1999.issue-060-en.xml IMF e-Library