I provide a simple model that is solved analytically to yield tidy expressions for the Pareto efficient tax structures and the optimal two-bracket marginal tax rates. It is for the special case of equally-sized groups of two skill types and no exogenous spending requirements of the government....

The development of the welfare state in the Western economies between 1930 and 1990 coincided with a puzzling pattern in the taxation of top incomes. Effective tax rates at the top increased sharply but then gradually decreased, even as social transfers continued rising. We propose a new theory...

The development of the welfare state in the Western economies between 1930 and 1990 coincided with a puzzling pattern in the taxation of top incomes. Effective tax rates at the top increased sharply but then gradually decreased, even as social transfers continued rising. We propose a new theory...

We develop a simple model of interregional tax competition to explore how the balance between common and region-specific aspects of a project's value affects the magnitudes of tax breaks offered by governments, when the firm possesses private information on the region-specific values. We examine...

This paper provides a new explanation for "tax holidays," as well as their subsequent removal in a tax reform stage. In a two-period model, I assume that perfectly competitive foreign investors are uncertain about the host country government's propensity for public spending, and that infinitely...

In this paper, the authors examine the economics of crime deterrence from an evolutionary perspective. A bimatrix game is used to model the interaction between populations of property owners and (potential) criminals, given exogenous levels of public policing and criminal sanctions. A crucial...

We extend the theoretical model of Rees and Shah (1986) to incorporate the effects of marginal tax rate progression and income transfers, as arguments in the individual's utility choice model between self-employment and paid- employment. Measures of the degree of progressivity in the tax and...