Interrelationship between optimal fiscal policy and property structure is analyzed in the general equilibrium model with government playing Ramsey planner role and private and public sectors responding rationally to the government actions. In first best allocations with 100% profit taxation and...

We compare methods to solve for optimal policies in heterogeneous agent-models with and without aggregate shocks, considering the optimal provision of a public good in a heterogeneous-agent economy. We first use a method based on transitions that we modify to neutralize the effect of the initial...

This paper addresses transboundary environmental problems in the context of an optimal tax problem, when part of the labor force is mobile across countries. The policy instruments include both commodity taxation and nonlinear income taxation. We show how the tax policy in a noncooperative...

Tax evasion is modeled as a risky activity and integrated into a standard problem of optimal tax design. It is shown that there is a trade off between reducing tax evasion and reducing tax distortion. Thus it is efficient to supplement a broad-based wage tax by a tax on specific consumption if...

In this paper a simple dynastic overlapping-generations model with homogeneous agents is used to analyze the optimal use of capital income tax, labor income tax and estate tax. The results of this analysis add to the conventional wisdom about capital income taxation: while it is true that in the...

The existing literature suggests that the concern for economic efficiency calls for individual taxation of married couples with a higher rate on the primary earner. This paper reconsiders the choice of tax unit in the Becker model of household production, which includes previous analyses as...