The literature on optimal redistributional instruments begins with the assumption that society has some preference for equality, leaving the precise degree unspecified. It then asks: How should society pursue that preference? More specifically, what kinds of policy instruments — whether...

This article explores subjects in optimal income taxation characterized by recent research interest, practical importance in light of concerns about inequality, potential for misunderstanding, and prospects for advancement. Throughout, the analysis highlights paths for further investigation....

This Handbook entry presents a conceptual, normative overview of the subject of taxation. It emphasizes the relationships among the main functions of taxation—notably, raising revenue, redistributing income, and correcting externalities—and the mapping between these functions and various...

This article examines the optimal level of tax compliance and the optimal penalty for noncompliance in circumstances in which the substance of the tax law is uncertain that is, when the precise application of the Internal Revenue Code to a particular situation is not clear. In such situations, a...

This document is the web appendix for Optimal Tax Policy and the Symmetries of Ignorance (June 2011). University of Pennsylvania, Institute for Law & Economic Research Paper No. 11-19; U of Penn Law School, Public Law Research Paper No. 11-21. Available at SSRN: "http://ssrn.com/abstract=1856123"...

What government-observable characteristics should determine the taxes that an individual pays and/or the transfers that she receives? This article focuses on a specific aspect of this fundamental question of tax policy: the implications of policymakers' uncertainty regarding the outcomes of tax...

A kind of folk theorem in tax policy states that too much uncertainty about the impact of taxing (or subsidizing) a particular taxable attribute is cause for excluding that attribute from the tax base. I extend the optimal tax model to test this hypothesis. In my model, the government is not...

Optimal policy rules - including those regarding income taxation, commodity taxation, public goods, and externalities - are typically derived in models with homogeneous preferences. This article reconsiders many central results for the case in which preferences for commodities, public goods, and...

Specialized theoretical and empirical research should in principle be embedded in a unified framework that identifies the relevant interactions among different phenomena, enables an appropriate matching of policy instruments to objectives, and grounds normative analysis in individuals' utilities...

This paper discusses tax policy measures to reduce corporate tax avoidance by extending taxation in the source country without imposing double taxation. We focus on four options: Bilaterally restricting interest and royalty deductibility, introducing an inverted tax credit system, levying...