Fundamental tax reform is examined in a heterogeneous overlapping-generations (OLG) model in which agents face idiosyncratic earnings shocks and uncertain life spans. Following Auerbach and Kotlikoff (1987), a Lump-Sum Redistribution Authority is used to rigorously examine efficiency gains over...

As a tax base, 'consumption' is sometimes argued to be less fair than 'income' because the benefits of not taxing capital income accrue to high-income households. We argue that, despite the common perception that consumption taxation eliminates all taxes on capital income, consumption and income...

This article proposes graphical methods to determine whether commodity tax changes are "socially improving," in the sense of improving social welfare or decreasing poverty for large classes of social welfare and poverty indices. It also shows how estimators of critical poverty lines and economic...

The Mirrlees Review recommends that commodity taxation should in general be uniform, but with some goods consumed in conjunction with labour supply (such as child care) left untaxed. This paper examines the validity of this claim in an optimal income tax framework. Contrary to the recommendation...

Over the past 15 years, tax reforms have profoundly changed the shape of OECD tax systems and rekindled interest in measuring effective tax burdens. Indeed, in order to understand past reforms or to evaluate the tax policies of particular countries, it is necessary to go beyond statutory rates...