Optimal tax the optimum. Stipulating this condition results in the following formula for the optimal top tax rate, if incomes are Pareto distributed: formula_1 where: Empirical estimation of the parameters of this equation suggests that the revenue-maximising top tax rate is between approximately 50% and 80%, although this estimate neglects long-run behavioural responses, which would imply higher elasticities and a lower optimal tax rate. Saez's analysis can also be generalised to tax rates other than the top rate. In the late 1970s, Arthur Laffer developed the Laffer curve, which demonstrates that there are two effects of changing tax rates: an arithmetic effect—if
From each according to his ability, to each according to his needs can be found in the Guilford Covenant in 1639: Some scholars trace the origin of the phrase to the New Testament. In Acts of the Apostles the lifestyle of the community of believers in Jerusalem is described as communal (without individual possession), and uses the phrase ""distribution was made unto every man according as he had need"" (): However, other scholars disagree with this, and claim that the phrase 'from each according to their abilities, to each according to their needs' has a non-religious origin, in 'the Roman legal concept of obligation in solidum' The Roman legal concept of obligation