In this survey of some central issues of tax and expenditure policy in an open economy, the authors consider the implications for policy of free--although not necessarily perfect--international mobility of commodities, capital, and labor. They examine the issues both from a positive and a...

Public provision of a private good can alleviate the informational problems that restrict redistribution through the tax/transfer system when the identity of high- and low-skill persons is hidden. A Pareto improvement may be achieved by publicly providing a private good and letting each consumer...

Using a partial equilibrium model, optimality rules for a commodity tax are derived for an economy that is exposed to cross-border shopping. In a competitive market, the conventional inverse elasticity rule is shown to be valid with the qualification that it is the elasticity of domestic rather...

A model is presented where workers move between two different occupations in response to economic incentives that are distorted by an income tax. Wages assume equilibrium values that are affected by the tax parameters. Incidence and welfare effects of small tax revisions are analyzed with...