We analyze the optimal nonlinear income tax schedule when taxpayers earn multiple incomes and differ along many unobserved dimensions. We derive the necessary conditions for the government’s optimum using both a tax perturbation and a mechanism design approach, and show that both methods...

We analyze the optimal nonlinear income tax schedule when taxpayers earn multiple in- comes and differ along many unobserved dimensions. We derive the necessary conditions for the government’s optimum using both a tax perturbation and a mechanism design approach, and show that both methods...

This paper studies optimal fiscal policy in a climate economy model with heterogeneous agents and distortionary taxes on labor and capital income. We derive optimal tax rules and show how they are modified relative to first-best and relative to the case without heterogeneity. We also explore...

We analyze the optimal nonlinear income tax schedule when taxpayers earn multiple in comes and differ along many unobserved dimensions. We derive the necessary conditions for the government’s optimum using both a tax perturbation and a mechanism design approach, and show that both methods...

We study the spatial misallocation resulting from subsidies for residential solar panels in the US and quantify the associated environmental costs. We build a structural model of solar panel demand and electricity production across the country and estimate the model by combining 1) remotely...

In West Africa, the Value Added Tax (VAT) policy consists of a uniform tax rate, but several items consumed by rich and poor households, are exempted. We provide an optimal tax framework to reflect on the welfare effects of such a tariff structure, in the context of current debates on domestic...

Pigouvian subsidies are efficient, but subsidies with limited durations are not Pigouvian. When using "time-limited" output subsidies, the optimal policy subsidizes output and investment, where investment subsidies separately correct for the limit. Because the change in production when the...

Restrictions on work hours are more important in countries with a large welfare state. We show that this empirical observation is consistent with the strategic effects of such restrictions in a welfare state in the context of optimal direct taxation in the tradition of Mirrlees (1971). Our...

We study the spatial misallocation resulting from subsidies for residential solar panels in the US and quantify the associated environmental costs. We build a structural model of solar panel demand and electricity production across the country and estimate the model by combining 1) remotely...

What are the implications of (endogenous) directed technical change for the design of redistributive income taxes? I study this question in a Mirrleesian economy augmented to include endogenous technology development and adoption choices by firms. Under certain conditions, any progressive tax...