The payment of zakat by the owners of wealth is one of the five pillars of Islam. Many countries operate with no enforcement of the obligation to pay, making zakat a form of voluntary redistribution. We analyze how zakat affects capital accumulation in a model that explicitly recognizes the...

This paper tests Barro's (1979) tax smoothing model of fiscal policy. The model implies that budget deficits and surpluses are used optimally to minimise the distortionary effects of taxation, given a certain path of spending. The theory has a number of implications both for the statistical time...

This paper investigates the role of taxation when public goods are privately provided.

The primary objective of this paper is to analyse the role of evasion possibilities as a determinant of the general structure of commodity and income taxes and of public goods supply. A secondary objective is to provide a defence of differentiated commodity taxes based on the screening role of...

Income-based targeting (or means-testing) reduces social security benefits as income rises. This form of targeting entails a well-known incentive distortion; the prospect for the recipients of losing part of their benefits if they were to earn more can deter them to work harder. In this paper,...

The level of economic activity is never measured perfectly because of the problems of definition, inaccuracies in data collection and the existence of the hidden economy. Such mismeasurement implies that government policies based on official statistics can be optimal only by chance. The analysis...

The paper shows how the differing incidence of specific and ad valorem taxation in imperfectly competitive markest can be exploited to control international oligopoly. If countries act cooperatively, the tax instruments used in combination achieve the same outcome, either the first-best or the...

In economies with Ramsey taxation, decreasing returns to scale, and private ownership, we show that second-best production efficiency is desirable when profit tax rates vary across groups of firms provided that the institutional rules which define profit incomes of consumers depend on the...

Employing a general equilibrium framework, Blackorby and Murty [2007] prove that, with a monopoly and under one hundred percent profit taxation and uniform lump-sum transfers, the utility possibility sets of economies with unit and ad valorem taxes are identical. This welfare-equivalence is in...

In a recent contribution Keen, Lahiri and Raimondos-MØller (2002) (European Economic Review, 46, 1559-1568), in a model of imperfect competition with no revenue e?ects, show that tax harmonization under the destination principle always makes one country better o? and maybe Pareto-improving,...