This paper examines the question of achieving a societal consensus around redistributive policies. Its extent is measured by the degree of work participation among the different skill classes that populate the economy. This consensus is driven both by the material incentives and heterogeneous...

A fundamental issues in designing any fiscal regime for non-renewable resources is the balance between rent taxes and royalties. This paper reviews the core issues that arise, in terms of both efficient rent extraction and correcting various market failures. Issues of asymmetric information, for...

We study the optimality of taxing capital income according to a Rate-of-Return Allowance proposed by the Mirrlees Review. In a mean-variance framework the optimal tax on risk-free returns is zero with constant returns to scale in private investment, but positive with decreasing returns to scale,...

We study optimal nonlinear income taxation when earnings can differ because of both ability and luck, so the income tax has both a redistributive role and an insurance role. A substantial literature on optimal redistribution in the absence of uncertainty has evolved since Mirrlees' original...

Deaton (1979) showed that if preferences are weakly separable in goods and labour and quasihomothetic in goods and the government imposes an optimal linear progressive tax, commodity taxes are redundant. Hellwig (2009) generalized the Deaton theorem by showing that the allocation obtained under...

Atkinson and Stiglitz show that with weakly separability, differential commodity taxes are unnecessary given an optimal nonlinear income tax. Deaton showed that with an optimal linear progressive income tax, commodity taxes are superfluous under weakly separable and linear Engel curves. Using...

Deaton (1979) showed that if preferences are weakly separable in goods and labour and quasihomothetic in goods and the government imposes an optimal linear progressive tax, commodity taxes are redundant. Hellwig (2009) generalized the Deaton theorem by showing that the allocation obtained under...