A simple two-period model is set up to carry out a normative analysis of the taxation of interest income and imputed rent from consumer durable goods. It is demonstrated how the optimum structure of this capital income taxation depends on savings and investment elasticities and cross effects...

Public provision of a private good can alleviate the informational problems that restrict redistribution through the tax/transfer system when the identity of high- and low-skill persons is hidden. A Pareto improvement may be achieved by publicly providing a private good and letting each consumer...

The paper discusses which distributional policies are efficient when the identity of the high and low skill persons is private information. Our major purpose is to identify the more efficient policy when, presumably for administrative reasons, the policy option is confined to the choice between...