The Vickrey Lecture: From Edgeworth to Vickrey To Mirrlees

William Vickrey's Agenda for Progressive Taxation is perhaps his best-known work. It stands roughly half way between Edgeworth and Mirrlees, both historically and intellectually. Edgeworth argued that the optimal tax (and transfer) system equalized incomes by taxing above-average incomes at 100 percent and transferring the proceeds to those below average. Mirrlees argued optimality in the presence of disincentive effects, which Edgeworth ignored, placing severe limits on high tax rates. Vickrey proposed 21 tax reforms to make a practical system of personal progressive taxation workable. The two most famous were cumulative lifetime averaging and decreasing power succession taxes. This paper reviews the proposals in light of subsequent intellectual and historical developments. Many of the issues Vickrey explored are relevant today whether the tax system is flat or progressive and whether the base is income or consumption.