Gaube, Thomas - University of Bonn, Germany - 2000
In a recent contribution, H. Naito (1999) has shown that production efficiency may be violated in the optimum with non …-linear income taxation. Using a slightly simpler framework, this paper complements Naito's analysis in showing that production … efficiency does not hold in the optimum with (i) non-linear and (ii) linear income taxation provided that second best and first …