In this paper we study the effects of various tax schedule discontinuities on the behavior of small firms using high-quality and population-wide tax register data from South Africa. We use the bunching method to analyse how these discontinuities affect the firm-size distribution. We first...

We study nonlinear income taxation in a Roy model in which agents' productivity is sectorspecific. We show that when income taxes can be sector-specific, the Diamond-Mirrlees theorem (according to which the second-best displays production efficiency) fails: social welfare (be it Rawlsian or...

This paper discusses the macroeconomic adjustment and the intergenerational and international incidence of a switch from the current destination-based value-added taxation to a origin-based VAT within a dynamic general equilibrium framework. Such a reform will affect the welfare levels of...