Standard tax incidence analysis deals with households and firms that buy and sell consumption goods, as opposed to financial institutions that buy and sell financial products. This paper develops a framework that allows us to study tax incidence on financial markets, and applies it to a...

This paper extends the model of optimal income taxation due to Mirrlees (Mirrlees, J., 1971. An exploration in the theory of optimum income taxation. Review of Economic Studies 38, 175-208) and includes private information on public goods preferences. A mechanism design approach is used to...

We study the interdependence of optimal tax and expenditure policies. An optimal policy requires that information on preferences is made available. We first study this problem from a general mechanism design perspective and show that efficiency is possible only if the individuals who decide on...