This paper analyzes optimal linear commodity taxes joint with non-linear income taxes. We provide optimal tax rules based on empirically observable elasticities, earnings and commodity demands. We demonstrate that commodities should be taxed/subsidized if – conditional on earnings – doing so...

Many things inform a country’s choice of tax system, including political considerations, public opinion, bureaucratic complexities, and ideas drawn from theoretical analysis. In this book, Robin Boadway examines the role of optimal tax analysis in informing and influencing tax policy design....

The Atkinson-Stiglitz Theorem states that if labor is weakly separable from goods in household utility functions, differential commodity taxation should not be not part of an optimal redistributive tax system. This Theorem, which is arguable the most policy-relevant result to come out of the...

This paper, prepared for the Handbook of Income Distribution (edited by A.B. Atkinson and F. Bourguignon), reviews some of the central issues that arise in thinking about the motives for, politics of, constraints on and measurement of, redistribution. Amongst the themes are: the potential...

A model is built in which regions with redistributive goals compete to attract mobile firms that provide jobs to their work forces. Regions are inhabited with an immobile population of disabled and able individuals. The aim of each regional government is to provide support for the disabled, who...

We examine how three sources of asymmetric information affect the supply of entrepreneurs and unemployment. In the first case, banks cannot observe entrepreneurs' risk of failure so ration credit. This increases the number of entrepreneurs and the level of unemployment. In the second case, firms...

Welfare programs including disability benefits have been considered as an efficient way of delivering transfers to the needy. This paper addresses the importance of administrative cost of welfare systems by focusing on an agency problem arising between the government and social workers, whose...

We study the features of optimal transfers to the non-employed which include those unable to work, the voluntarily unemployed, and the involuntarily unemployed. Both voluntary and involuntary unemployment are endogenous. We analyze optimal government policies in the presence of two types of...

This paper, prepared for the Handbook of Income Distribution (edited by A.B. Atkinson and F. Bourguignon), reviews some of the central issues that arise in thinking about the motives for, politics of, constraints on and measurement of, redistribution. Amongst the themes are: the potential...

Regions inhabited with an immobile population of disabled and able individuals compete to attract mobile firms that provide jobs. The redistributive goal of regional governments is to support the disabled, who cannot work. Able individuals may work, be involuntary unemployed because of frictions...