Our analysis shows that Pareto's instincts were right, for under certain assumptions, personal distributions of income tend to be similar even when the underlying functional determinants are quite different. We prove that if the initial functional income distribution is sufficiently "compact" -...

We provide a model for analyzing effects of the tax system and spending programs on the determination of government spending and taxpayer welfare and show that a tax system or spending program which is suboptimal from a Ramsey point of view can improve taxpayer welfare because the system creates...