There is some concern that immigration contributes to a larger current account deficit in a net borrowing country like Australia. The reason is believed to be that the immigrants on balance have a lower net saving than those born in the country.

In a number of high-income countries over the past few decades there has been a large growth in income inequality and at the same time a shift in the burden of taxation from the top to the middle of the income distribution. This paper applies the theory of optimal piecewise linear taxation to...