Journal of Applied & Computational Mathematics

The Optimal Tax Model

Abstract

Valeria Bondarenko

In this paper we analyze and propose new method and algorithm of selecting the optimal labor time as a function of skills following our main references. The optimal

labor time is a situation when the utility function of individual reaches a maximum. One of the main differences with is our algorithm for creation the skill distribution.

Saez proposed and considered the distribution of skills with using empirical distribution of income and the approximation the labor income tax by linear model. The

author proved that with using the presented utility function of consumption and labor effort, it will be possible to obtain some level of skills which will be adaptable with

observed (public information) taxable revenue which corresponds proposed linear tax schedule

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