# TaxSolver: A methodology to design optimal income tax reform

**Authors:** Mark Verhagen, Menno Schellekens, Michael Garstka  
**arXiv:** [2508.03708](https://arxiv.org/abs/2508.03708)  
**Date:** 2025-07-21  
**Summary page:** https://www.summarizepaper.com/en/paper/2508.03708v1/

## Key points

- TaxSolver: a methodology for designing optimal income tax reforms
- Addresses complexity of existing tax systems and lack of appropriate tools
- Allows policymakers to focus on desired outcomes and fiscal guarantees
- Determines optimal set of tax rules that satisfy criteria or identify unfeasible demands
- Various simulated examples illustrate effectiveness in mirroring real-world scenarios
- Importance of defining clear political aims and constraints before reform efforts
- Emphasizes reducing marginal pressure and complexity within the tax system
- Outlines specific fiscal guarantees at government and household levels
- Provides systematic approach to designing reforms aligned with desired outcomes and fiscal requirements
- Aims to facilitate more efficient decision-making in shaping income tax policies

## Summary

A team of researchers has developed TaxSolver: a methodology for designing optimal income tax reforms in response to the growing calls for streamlined and improved tax systems across the developed world. The complexity of existing tax systems and lack of appropriate tools have made executing such reforms challenging. However, TaxSolver addresses this issue by allowing policymakers to focus on their desired outcomes and necessary fiscal guarantees. By inputting these goals into TaxSolver, policymakers can determine the optimal set of tax rules that satisfy all criteria or identify when certain demands are mathematically unfeasible. Various simulated examples of tax code reforms are presented to illustrate the effectiveness of TaxSolver in mirroring real-world scenarios. Furthermore, envisioning a scenario where Jesse and her colleagues utilize TaxSolver highlights the importance of defining clear political aims and constraints before embarking on reform efforts. This hypothetical "recipe" for reform emphasizes reducing marginal pressure and complexity within the tax system while also outlining specific fiscal guarantees at both government and household levels. By incorporating these elements into the design process, policymakers can navigate the complexities of income tax reform with greater clarity and precision. Overall, TaxSolver offers a valuable tool for optimizing income tax systems by providing a systematic approach to designing reforms that align with desired outcomes and fiscal requirements. Through its methodology, TaxSolver aims to facilitate more efficient and effective decision-making in shaping income tax policies for the benefit of society as a whole.