The theoretical analysis of optimal commodity taxation is advanced, but there is only limited empirical evidence to guide commodity tax policies. With this paper, we contribute to this body of literature by empirically examining, using Finnish consumption data, the relation between working...

This paper concerns the calculation of optimal taxes on commodities that contain a common externality-generating component. The first-best solution is characterized by a form of marginal cost pricing with production costs increased according to the harm content of commodities valued at marginal...

The standard theory of optimal income taxation under uncertainty has been developed under the assumption that individuals maximise expected utility. However, prospect theory has now been established as an alternative model of individual behaviour, with empirical support. This paper explores the...