The services of many public inputs (e.g., dams, irrigation systems, and highways) are provided to private firms on a free-access basis. If these services enter constant-returns-to-scale production functions then there are decreasing returns to scale in the private factors. Thus a change in the...

This article studies the properties of a switch from an income tax to a consumption tax in the presence of bequests. The author shows that the consumption tax will distort the bequest decision if bequests are taxed at the consumption tax rate but not when bequests are exempt. It is possible that...