Birthday: July 5, 1936 (Cancer)
Born In: Minnigaff, Kirkcudbrightshire, Scotland
James Mirrlees
(Economist)
Sir James A. Mirrlees was a Scottish economist who received the Nobel Prize for his research on economic incentives in 1996. He shared the Nobel Prize with William Vickrey of the ‘Columbia University’. His main contribution to the field of economics was his path-breaking research work on optimal taxation on income or a progressive taxation process which included incentives for earning. He started his research work in an era when taxes were very high and the economy was controlled centrally. He assumed that the government should tax the rich more and use it for the benefit of the poor. He also made further assumptions that the rate of taxes has a direct effect on the incentive of people to work and earn more. With these assumptions he calculated the highest marginal tax rate that should be applied on the high-income groups. The optimal tax rate that he computed was actually only 20 percent of the income and not 83 percent as was prevalent at that time in Britain. Moreover he concluded that everyone should be taxed at a flat rate of 20 percent for the maximum benefit of all wage earners. He also helped to design contracts that would provide the maximum incentives to the employees of companies.
Economists #356
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