-sufficiency of the ETI, namely tax deductions. Building on a theoretical framework which incorporates deductions in a standard … optimal-tax model, we show that the ETI is not sufficient for welfare analysis if (i) deductions generate externalities and if … (ii) deductions are responsive to tax-rate changes. While the first condition should arguably hold true for the majority …

We present a conceptual framework for the analysis of politically feasible tax reforms. First, we prove a median voter … theorem for monotonic reforms of non-linear tax systems. This yields a characterization of reforms that are preferred by a … majority of individuals over the status quo and hence politically feasible. Second, we show that every Pareto-efficient tax …

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