This paper studies optimal capital and labor income taxes when the benefits of public goods are age-dependent. Provided the government can impose a consumption tax, it can attain the first-best resource allocation. This involves the uniform taxation of the cohorts' labor income and a zero...

In this paper we argue that government's allocation of resources among competing age groups has significant bearing on labor and capital supply and optimal tax policies. Empirics reveal that allocation of public expenditure is highly favorable to the old cohorts in developed countries. However,...

Scotland is engaged in a lively and on-going debate on greater fiscal autonomy and independence, which is politically controversial, especially in respect of tax-varying powers. The Scottish Parliament has the power to make a balanced-budget adjustment in public expenditure by varying the basic...

This paper uses a simple model of fiscal competition between local jurisdictions to analyse the impact of intergovernmental grants on the composition of public spending. We find that a higher degree of redistribution within a system of ʺfiscal equalisationʺ coincides with a smaller overall...