The paper investigates whether price subsidization or public provision of a private good, x, is the more efficient redistributional instrument in addition to an optimal nonlinear income tax. The identify of high and low skill individuals is assumed to be private information generating a...

The simplest pedagogical tools are employed to clarify that there is a double dividend from shifting the tax policy towards green taxes only if taxes were not set optimally before the environmental concern was put on the agenda. In general a single or less than single dividend cannot be ruled...