This paper explores how the persistently popular "classical" logic of benefit based taxation, in which an individual’s benefit from public goods is tied to his or her income-earning ability, can be incorporated into modern optimal tax theory. If Lindahl’s methods are applied to that view of benefits, first-best optimal policy can be characterized analytically as depending on a few potentially e...

The potential interactions among fiscal policies, investments and economic growth are complex and manifold. In this paper, we will perform a systematic comparative analysis of the various economic insights that are currently available on these complex relationships, both theoretically (by a selective literature review) and empirically (by investigating available data from various countries). De...

Should Egalitarians Expropriate Philanthropists? Wealthy individuals often voluntarily provide public goods that the poor also consume. Such philanthropy is perceived as legitimizing one’s wealth. Governments routinely exempt the rich from taxation on grounds of their charitable expenditure. We examine the normative logic of this exemption. We show that, rather than reducing it, philanthropy ma...

Many government contracts with or policies towards oligopolistic sectors essentially involve private firms selling a given proportion (O), or quantity, of output to the government at a fixed price (pR) with the remainder being sold on the open-market. Often this is combined with consumer rationing. Examples include cement and sugar in India, and health, housing and defence in many countries. Th...

We assessed public opinion on nutrition-related policies to address child obesity: a soda tax, restrictions on advertising unhealthy foods and beverages to children, and restrictions on siting fast food restaurants and convenience stores near schools. We analyzed data from 998 adults (aged ≥18 years) in the 2011 Los Angeles County Health Survey. Support was highest for advertising restrictions ...

Trade subject to predation generates externalities within and between markets. Efficient tax, infrastructure and enforcement policies internalize the net externality — more trade ⇒ fewer predators but drawn to trade at rising cost. The balance is positive (negative) as enforcement is weak (strong). Dual economies pair weak Periphery and strong Core enforcement markets. Efficient taxation and in...

The past academic literature on tax policy has focused almost entirely on the analysis of tax structures in the richest countries, particularly the U.S. Overall the optimal tax models explain reasonably well the observed tax policies in these countries. As summarized in Gordon (2000), for example, past theoretical work suggests that taxes on consumption or labor income should dominate use of ca...

We examine the distribution of hours of work across 2-digit industrial sectors in OECD countries. We find large disparities when sectors are divided into three types: health and social work, a group that produces goods with home substitutes and all others. We attribute the disparities to the different tax and subsidy policies that countries follow, in a nested CES preference structure with home...

We develop an endogenous growth model driven by externalities from both private and public capital. The government levies distortionary taxation to finance a publicly provided consumption good and public infrastructure. Firms face adjustment costs. We compare the optimal and time-consistent policies in a linearquadratic approximation of the model. Although the time-consistent equilibrium is sub...

Why are some policies protested more than others? New data on protest against eight categories of taxation in twenty rich democracies from 1980 to 2010 reveal that economically and socially concentrated taxes are protested most, whereas taxes that confer entitlement to benefits are protested least. Other features of policy design often thought to affect the salience or visibility of costs are u...