Poll Subsidy and Excise Tax.

It is well known that modern governments are unwilling to use poll taxes because it corresponds to political suicide. Still, poll taxes are allegedly the most efficient form of taxation. Building on Eaton and Rosen (1980) and Peck (1989), the goal of this paper is to show a case where an excise tax levied on a certain insurance service is preferred to a poll tax. The preference for an excise tax is such that it would be optimal for workers if the government set the excise tax so high as to be able to give lump-sum subsidies (i.e., a poll subsidy) to all workers in the economy.