Equity issues of the dual income tax (DIT) have until recently been left aside in the field of economics. Since a dual income tax needs different modeling from that for a comprehensive one, this paper offers firstly a quantitative framework to measure redistributive effects; it turns out that...

How is the optimal level of Pigouvian taxation influenced by distributive concerns? With second-best instruments, a higher level of income redistribution calls for a lower level of Pigouvian taxation. More redistribution implies higher distortions from income taxation. Pigouvian tax revenues...

This paper studies the design of indirect redistributive taxation and of corrective taxation in the presence of status goods, allowing for the possibility that illegal copies of those goods may be purchased on black markets (the phenomenon of piracy). Heavy taxation of status goods, despite the...

An empirically based simulation model consisting of a representative consumer is constructed and calibrated, for the purpose of finding optimal commodity taxes for Norway. The model includes endogenous labor supply and cross-border shopping. Focusing on commodities exposed to cross-border...

Over the last few years concern for income inequality in Europe has increased remarkably. In this context, taxation is an important redistributive instrument, and we investigate the redistributive role of direct taxes. We focus on the EU-15 countries and the evolution over the period 1998-2008,...

The European Commission is evaluating the performance of the common VAT, which has many shortcomings. The numerous exemptions and differentiated rate structures violate the logic and functionality of the VAT. The exemptions distort input choices and outsourcing policies. Reduced rates are...

When debating an existing or proposed indirect tax, particular emphasis is often given to the disproportional effect of the tax. This effect is intended to show how the welfare loss from the tax is distributed across households with various income levels. Typically, the disproportional effect is...

This paper presents empirical evidence on the distributional effect of public higher education through analysis of a cross-sectional view of West Germany in 1997. In contrast to a widely held hypothesis in economics, our findings do not show evidence for a regressive effect. The use of a...

We investigate how continental European unemployment can be reduced without reducing unemployment benefits and without reducing the net income of low-wage earners. Lower unemployment replacement rates reduce unemployment, the net wage, and unemployment benefits. A lower tax on labor increases...

It is often argued that without tax-exemptions for the production sector environmental tax reforms substantially reduce profits and endanger employment. We challenge this view and investigate the consequences of both a small and alarge tax reform in the case of a monopoly. We show that these...