This paper studies dynamic non-linear taxation in a two-period model without government commitment and a continuum of agents with privately known skill parameters, which are constant overtime. The government is utilitarian but cannot commit at t=1 to the tax scheme that she will propose at t=2....

In this paper I study dynamic optimal taxation in a private information economy with continuum of individual productivity shocks that are persistent over time. I formulate the problem recursively and use first order approach to simplify it. I provide full justification of the first order...