A basic premise of optimal tax theory is that information about individuals' productivity and time worked is unobservable and does not enter into the government's objective function. In this paper, we explore the implications of a framework where earning capacity both plays an intrinsic and an...

This paper analyses the choice between the residence principle and the source principle in international capital taxation. The focus of the literature has been on the efficiency aspects of the two principles. The present paper ties in with this literature, but incorporates effects on both...