TITLE:
Shapley Value and Income Taxation
AUTHORS:
Robert A. Agnew
KEYWORDS:
Income Taxation, Cooperative Game Theory, Shapley Value
JOURNAL NAME:
Theoretical Economics Letters,
Vol.12 No.4,
August
16,
2022
ABSTRACT: Income taxation is modeled as a spatial voting game
where Shapley value leads to a simple linear tax function on gross income with
a single marginal tax rate and a universal basic income subsidy. Shapley net
income is not generally in the game core; therefore, it is inherently unstable
and subject to relentless pressure from higher gross income individuals to
reduce their taxes and increase their net incomes.