Tax competition among states and jurisdictions has already been examined many times in the economic literature. However, the main scope of the research was focused on a tax rates competition in income taxes and its consequences in bringing direct investments. This scripture/commentary tries to analyze various instruments and beneficiaries of the tax system competition and provide a general over...

We analytically and quantitatively examine a prominent justi…cation for capital income taxation: goods preferred by those with high ability ought to be taxed. We study an environment where commodity taxes are allowed to be nonlinear functions of income and consumption and …nd that, when ability is positively related to a preference for a good, optimal marginal commodity taxes on this good may b...

[ Journa © 2013 market. We study this problem in the context of a directed search model of the labor market populated by homogeneous workers and heterogeneous firms. The optimal redistribution can be attained using a positive unemployment benefit and an increasing and regressive labor income tax. The positive unemployment benefit serves the purpose of lowering the search risk faced by workers. ...

This paper estimates that the US could attain large welfare gains by implementing an optimal Ramsey tax policy that taxes consumption and income. It is also found that the welfare implications associated with taxing consumption are quantitatively more important than those associated with dynamically taxing income. Indeed, replacing income taxes with a constant consumption tax leads to a welfare...

The dual income tax combines a progressive tax on labor income and a lower flat rate tax on income from capital. Denmark, Finland, $orway, and Sweden adopted dual income taxes to address a set of tax challenges that arose in the late 1980s and early 1990s. Although developing countries face much different economic, political, and tax environments from the $ordic countries, the dual income tax m...

Traditional models of capital budgeting including taxes are based on deterministic tax rates and tax bases. In reality, however, there are multiple sources of tax uncertainty. Tax reforms induce frequent changes in both tax rates and tax bases, making future taxation of investments a stochastic process. Fiscal authorities and tax courts create additional tax uncertainty by interpreting current ...