This paper is concerned with cross-dependencies between endogenous market structure and tax policy. We extend the Mirrlees (1971) model of income taxation with a monopolistic competition framework with general additively separable consumer preferences. We show that price and variety distortions...

This paper is concerned with cross-dependencies between endogenous market structure and tax policy. We extend the Mirrlees (1971) model of income taxation with a monopolistic competition framework with general additively separable consumer preferences. We show that price and variety distortions...

We study an optimal income taxation problem in a Mirrleesian setting with endogenous product prices and positive firm profits. When firm profits are progressively distributed among agents, we show that the public authority uses the price level as a redistributive tool favoring lower prices in...