In many public health care systems treatment is rationed by waiting time. We examine the optimal allocation of a .xed supply of a treatment between di¤erent groups of patients. Even in the absence of any distributional aims welfare is increased by third degree waiting time discrimination....

The optimal allocation of a public health care budget across treatments must take account of the way in which care is rationed within treatments since this will affect their marginal value. We investigate the optimal allocation rules for health care systems where user charges are fixed and care...

This paper characterizes the optimal tax and expenditure policies in economies where households’ unobservable gross earnings depend on exogenous (or inherited) capabilities and input investments. In a two-class economy, optimal redistribution relies on non-linear income taxation and input...

House prices have increased significantly in Canada over the past decade, driving household debt and residential construction activity to historical highs. Although macro-prudential tightening has slowed the pace of household borrowing in the last few years, house prices have continued to trend...

Finnish municipalities enjoy ample fiscal autonomy and provide or arrange the provision of a large share of public services. In recent years, their spending and debt has been increasing steadily, especially because of population ageing and increases in the cost of health care and social...

Previous literature has shown that public provision of private goods can be a welfare-enhancing device in second-best settings where governments pursue redistributive goals. However, three issues have so far been neglected. First, the case for supplementing an optimal nonlinear income tax with...

Recent literature on optimal nonlinear taxation has shown that in models with a single level of government public provision of private goods can help redistribution by mitigating self-selection constraints. The aim of the present paper is to extend the analysis to a fiscal federalism setting...

This paper combines poverty considerations in the social welfare function and tax evasion into an optimal general income tax problem. It investigates the optimal audit and tax structures using a model with two types of individual, endogenous labor supply and a hybrid social welfare function that...

The paper studies the role of income taxes and admission fees in financing excludable and nonexcludable public goods in a large economy. A renegotiation proofness condition makes the multidimensional Bayesian mechanism design problem tractable. Resulting formulae for optimal income taxes and...

We show that, in a setting where tax competition promotes efficiency, variation in the extent to which firms can use public goods to reduce costs brings about a reduction in the intensity of tax competition. This in turn brings about a loss of efficiency. In this environment, a `minimum tax'...