This paper examines heterogeneous effects of uncertainty of the U.S. tax policies across income classes. We construct a multi-class general equilibrium stochastic OLG model with a stochastic process of effective tax rates. In accordance with empirical evidence, the model includes two types of...

In a partial equilibrium setting without price uncertainty, the balanced-budget substitution of an ad valorem tax on output for a specific (unit) tax can enhance welfare in imperfectly competitive markets and is without impact in a competitive world. This paper demonstrates that a substitution...