When a public good is excludable it is possible to charge individuals for using the good. We study the role of prices on excludable public goods within an extension of the Stern-Stiglitz version of the Mirrlees optimal income tax model. Our discussion includes both the case where the public good...

The paper discusses which redistributional policies are efficient when the identity of the high and low skill persons is private information. Our major purpose is to identify the more efficient policy when, presumably for administrative reasons, the policy option is confined to the choice...

There is a well established case for public provision of certain private goods when the government pursues income redistribution under asymmetric information about the skill levels of the agents of the economy. This paper higlights the role of tax funding of day care for children, which is a...

Several contributions in the optimal taxation literature have emphasized that, when individuals’ preferences are not separable between leisure and other goods, it is desirable to supplement a nonlinear income tax with public provision of private goods. Moreover, it has also been shown that the...

Addressing extensive labour supply responses, the literature has established a case for larger transfers to the working poor than to even poorer non-working people. This paper casts new light on this result. I argue that the result hinges crucially on the labour supply responses of people in...

Using an optimal taxation model combined with a previously neglected scheme of public provision of private goods, we show that there is an efficiency gain if public provision of selected goods replaces market purchases and that efficiency requires marginal income tax rates to be higher than if...

Non-linear income taxes and linear commodity taxes are analysed when people differ with respect to ability, high-skilled agents have heterogeneous preferences, and neither individual abilities nor preferences are observable. The paper highlights how informational constraints may motivate...

The incidence and efficiency losses of taxes have usually been analysed in isolation from public expenditures. This negligence of the expenditure side may imply a serious misperception of the effects of marginal tax rates. The reason is that part of the marginal tax may in fact be payment for...

Much of the literature on externalities has considered taxes and direct regulation as alternative policy instruments. Both instruments may in practice be imperfect, reflecting informational deficiencies and other limitations. We analyse the use of taxes and regulation in combination, to control...

Much of the literature on externalities has considered taxes and direct regulation as alternative policy instruments. Both instruments may in practice be imperfect, reflecting informational deficiencies and other limitations. We analyse the use of taxes and regulation in combination, to control...