The literature on the use of Differencial commodity taxes/subsidies and that on quantity controls to supplement income taxation have developed separately from each other. The purpose of this paper is to combine these 2 strands in the standard framework of optimal non-linear income taxation.

This article presents a survey of how optimal income taxation is influenced by labour market considerations. We begin with the standard supply-side optimal income tax model of Mirrlees, and outline the various extensions to that model. We then consider how optimal taxation is affected by various...

This paper examines how sequential decision-making by two levels of government can result in fiscal imbalances. Federal-regional transfers serve to equalize the marginal cost of public funds between regions hit by different shocks. The optimal transfers minimize the efficiency cost of taxation...

This paper surveys the various forms of market failure that can arise when innovating entrepreneurs consider entering an industry, and outlines possible implications for public policy. Externalities can arise from entrepreneurial activities such as spillover benefits from new innovations and...

We characterize a mechanism for reducing pollution emissions in which countries,　acting non-cooperatively, commit to match each others’ abatement levels and may　subsequently engage in emissions quota trading. The mechanism leads to an efficient level of emissions, and if the matching...

We study how labor mobility affects optimal transfers in a federation and the fiscal imbalances that arise because of constraints on federal tax-transfer policies. Fiscal imbalance — a deviation from the optimal fiscal gap — occurs when the second-best allocation of resources in a federation...

The Tiebout model has been the reference point for the classical approach to fiscal federalism. Its emphasis on mobility, benefit taxation, and the advantages of fiscal competition have informed fiscal federalism since the seminal contributions of Musgrave and Oates. This paper reviews the...

This paper examines various circumstances under which decentralized pollution policies can be efficient both in federal settings and in multi-region settings with labor mobility. We consider a model in which pollution control policies are set by regional governments non-cooperatively and...

We characterize a mechanism for reducing pollution emissions in which countries, acting non-cooperatively, commit to matching each others' abatement levels and may subsequently engage in emissions quota trading. The mechanism leads to an efficient level of emissions, and if the matching...