There is often a gap between the prescriptions of an 'optimal' tax system and actual tax systems, some of which can be … reviews the political economics literature on tax systems and reforms to see whether political mechanisms allow us to better … understand why tax systems look the way they look. Finally, we exploit a database of reforms in labor taxation in the European …

This paper deals with optimal income taxation under labor outsourcing and FDI. We show how the optimal income tax …