Mirrlees, James Alexander (1936-2018), a British economist, made a major contribution to economics with the theory of incentives. Incentives are ways of encouraging people to work harder and so produce more goods and services. In 1996, he won the Nobel Prize in economic sciences for the work he did on taxation and economic incentives. He shared the prize with William Spencer Vickrey of Canada.
Mirrlees’s research focused on creating incentives in tax systems. He developed taxes that balanced the need to encourage people to work harder—by lowering income tax rates—with the conflicting need to distribute wealth more fairly—by raising tax rates. He also developed the golden goose theory. This theory states that although high taxes redistribute wealth more evenly between the rich and the poor, they also reduce the total amount of wealth available for redistribution. According to Mirrlees, the highest marginal tax rate should be zero, encouraging people who earn just less than the highest income tax bracket to work more, benefitting everyone.
Mirrlees was born on July 5, 1936, in Minnigaff, Scotland. He received a Ph.D. from Cambridge University in the United Kingdom in 1963. Mirrlees became professor of economics at Nuffield College, University of Oxford in 1968 and, in 1995, professor of economics at Trinity College, Cambridge University. Mirrlees died on Aug. 29, 2018.
