This paper analyzes the efficient taxation of oil and capital income in an oil-dependent infinite-lived economy facing perfect capital mobility. Two cases are examined: one with product market imperfections and free tax choice, one with perfect competition and tax restrictions. The optimal tax...

This paper contributes to resolving the puzzle that in practice most countries use ad valorem (corporate income) taxation, while a large part of the tax competition literature views business taxes as unit (wealth) taxation. We point to the dual role that corporate taxation plays in attracting...

This paper provides an overview and assessment of alternative methods of taxing capital income. We begin by considering why, and to what extent, capital income should be taxed. Having established a reasonably robust case for such taxation, we then review the difficulties of taxing capital income...

In economic analyses of the effects of tax policies, one commonly encounters discussions of the equivalence of apparently different policies, where equivalence is defined as the policies having the same impact on fundamental economic outcomes. These related tax policies may differ in many...

We compare unit and ad valorem commodity tax regimes under the "Leviathan hypothesis" that the government seeks to maximize tax revenue. We show that the ad valorem tax regime welfare-dominates the unit tax regime if and only if the economy exhibits "ad valorem under-shifting" in response to a...