Optimal policy rules - including those regarding income taxation, commodity taxation, public goods, and externalities - are typically derived in models with homogeneous preferences. This article reconsiders many central results for the case in which preferences for commodities, public goods, and...

This Handbook entry presents a conceptual, normative overview of the subject oftaxation. It emphasizes the relationships among the main functions of taxation - notably, raisingrevenue, redistributing income, and correcting externalities - and the mapping between thesefunctions and various forms...

A substantial literature examines second-best environmental policy, focusing particularly on how the Pigouvian directive that marginal taxes should equal marginal external harms needs to be modified in light of the preexisting distortion due to labor income taxation. Additional literature is...