The paper analyses the benefits of earmarking the environmental tax revenues in a second-best world with asymmetry of information between government and taxpayers. Taxpayers are assumed to have taste differences over consumption of an environmentally harmful activity. The government, which...

We analyze the decision rules governing public employment policy, capital allocation between private and public sector, and the size of the public sector in a two-type and two-sector optimal nonlinear income-tax model with endogenous wages. The government can reduce wage inequality in the...