Budget-neutral tax wedge reductions rank high in the policy agenda of several EMU member states. Using a New Keynesian DSGE model of a monetary union with a complex labour market structure and a comprehensive public sector, we evaluate the macroeconomic and welfare effects of reducing the firms'...

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...

This paper addresses the reduction of market failure under imperfect competition. It proposes a tax-scheme that provides firms with an incentive to forgo their market power: Firms optimize after-tax profits. Now simply consider a firm's gross profit margin the unique tax-rate it is charged on...