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...

Two-sided platform firms serve distinct customer groups that are connected through interdependent demand, and include major businesses such as the media industry, banking, and the software industry. A well known textbook result in one-sided markets is that a government may increase a...

Research in behavioral economics has uncovered the widespread phenomenon of people making decisions against their own good intentions. In these situations, the government might want to intervene, indeed individuals might want the government to intervene, to induce behavior that is closer to what...

This paper assumes the standard optimal income tax model of Mirrlees (Review of Economic Studies, 1971). It gives fairly mild conditions under which the optimal nonlinear labor income tax profile derived under maximin has higher marginal tax rates than the ones derived with welfarist criteria...

There is a deadweight loss from imposing a tax on a single commodity, but there is no such loss from a uniform tax on all commodities with lump-sum return, and obviously no loss if no commodity is taxed. The object of this paper is to weave a consistent story relating these three well...

We examine the transitional dynamics of Lucas' supply side model of the US economy in order to specify the effects of capital taxation on economic growth and welfare. We restrict the analysis to policy plans characterized by constant capital taxes and require the government to maintain a...

The paper studies optimal income taxation in a model with labor supply responses at the intensive and the extensive margin. It is shown that a utilitarian desire for redistribution does not pin down the sign of the optimal marginal tax rate: labor supply may be downward distorted, undistorted,...

This paper studies the design of the optimal linear taxation of bequests when individuals differ in wage as well as in their risks of both mortality and old-age dependence. We assume that the government cannot distinguish between bequests motives, that is whether bequests resulted from...

We propose and axiomatically characterize a family of welfare criteria that prioritize individuals making larger sacrifices. By combining efficiency with a concern for equality of sacrifice, our criteria avoid serious shortcomings of utilitarianism. We illustrate our results within the...

This paper examines the optimal direction of marginal income tax reform in the context of New Zealand, which recently reduced its top marginal income tax rate to one of the lowest in the OECD. A behavioural microsimulation model is used, in which social welfare functions are defined in terms of...