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68Application: Taxation of the Familyo Under federal ine tax law, fundamental unit of ine taxation is familyo Is excess burden minimized by taxing each spouse’s ine at same rate?o Should husbands face higher marginal tax rates than wives?169Optimal User FeesZ per year$ A Natural MonopolyDZMRZACZMCZZMPMACMZ*P*ZAo Marginal Cost Pricing with Lump Sum Taxesn Benefits received principleo Average Cost Pricingo A Ramsey Solution1610Optimal Ine TaxationEdgeworth’s Modelo W = U 1 + U2 + … + U no Individuals have identical utility functions that depend only on their ineso Total amount of ine fixedo Implications of model for ine tax1611Optimal Ine TaxationModern Studieso Supplyside respon