Besley (1988) is one of the few exceptional articles containing non-welfarist optimal tax devices. Feehan (1990) reports an error in his first-best rules. The present note argues that Besley's second-best rules optimize the welfare of phantom agents rather than the corrected welfare of real...

Besley (1988) is one of the few exceptional articles containing non-welfarist optimal tax devices. Feehan (1990) reports an error in his first-best rules. The present note argues that Besley's second-best rules optimize the welfare of phantom agents rather than the corrected welfare of real...