We study the link between second-best production efficiency and the constraints on income distribution imposed by private ownership of firms in economies with Ramsey taxation. We review the result of Dasgupta and Stiglitz [1972], Mirrlees [1972], Hahn [1973], and Sadka [1977] about firm-specific...

Employing a general equilibrium framework, Blackorby and Murty [2007] prove that, with a monopoly and under one hundred percent profit taxation and uniform lump-sum transfers, the utility possibility sets of economies with unit and ad valorem taxes are identical. This welfare-equivalence is in...