The impact of population aging on the steady state solution to a Ordover-Phelps (1979) overlapping generations optimal nonlinear income tax problem with two types of workers and quasilinear-in-leisure preferences is investigated. A decrease in the rate of population growth, which leads to an...

This paper analyses the conditions under which savings should receive special tax treatment. A two–class overlapping generation model is presented, and a simple condition for the taxation or subsidisation of savings is derived and interpreted.