This paper studies the optimal commodity taxation problem when time taken in consumption is a perfect substitute for either labor or leisure. It shows that while labor substitutability affects the optimal tax structure, leisure substitutability leaves the classical optimal tax results intact. In...

The marginal cost of public funds is the equilibrium price at the intersection of the appropriately-defined demand curve for and the supply curve of public expenditure. In a world with identical people and with no excess burden of taxation, that price would have to be 1. Otherwise the median...

Disputes over the marginal cost of public funds may be about its magnitude in any given time and place or about its role in cost-benefit analysis. This paper is about the latter. The Samuelson rule was devised for an omnipotent, omniscient and benevolent government. This paper is about how the...

We study the optimal redistributive tax structure when the population can be disaggregated into tagged groups. We begin with the case in which the tag has no normative significance, but simply separates the population into identifiable groups with different distributions of ability-types. Under...

This paper derives optimal commodity taxes in a two-class economy, based on Chaudhuri (1986) and Diamantaras and Thomson's (1990) λ-equitability. An allocation is λ-equitable if no agent envies a proportion λ of the bundle of any other agent. We examine the properties of Pareto undominated...

Through tax evasion, through the labour-leisure choice or in other ways, taxpayers reduce the tax base in response to an increase in the tax rate. The process is commonly-believed to generate a humped Laffer curve with a revenue-maximizing tax rate well short of 100%. That need not be so. In the...

We examine how the introduction of self-control preferences influences the trade-off between two fundamental components of a public pension system: the contribution rate and its degree of redistribution. The pension regime affects individuals' welfare by altering how yielding to temptation (i.e....

A common, though by no means universally-accepted doctrine among practitioners of law and economics is that redistribution is no business of the law. This efficiency-only doctrine is not that redistribution is unworthy as a social objective, but that any given benefit to the poor is attainable...

Tax analysis and forecasting of revenues are of critical importance to governments in ensuring stability in tax and expenditure policies. To augment timely and effective analysis of the revenue aspects of the fiscal policy, governments have increasingly turned toward in-house tax policy units...

This paper takes a broad approach in the sense that only the fundamental structure elements of each tax system are considered as part of the benchmark tax system. Moreover, this paper will go beyond the traditional tax expenditure reporting by taking into account an ideal tax system with minor...