Using data from the financial statements of Ontario Hydro and an observed cost of importing electricity to the province, we provide an estimate of the hydroelectric rent that is potentially available in Ontario as tax revenue. Our results suggest that the existing water charges in Ontario can be...

Do progressive marginal income tax rates discourage self-employment? We assume risk neutrality to construct an implicit surtax on stochastic income relative to steady income, arising from a convex tax schedule. It is computed as part of a structural probit model with earnings equations and a tax...

In this paper we examine the optimal taxation of corporate profits in a multi-period limit pricing model where a dominant firm faces expansion by a competitive fringe. The optimal policy requires tax rates to vary both intertemporally and across firm sizes, and balances the benefit of fringe...

The paper shows how a tax holiday may signal to a skepticalcapital market that the future level of taxation will be moderate.After the signal has informed investors that the host countrygovernment is a low-spender, the tax profile flattens out, correspondingto a tax reform stage. Contrary to the...

The principal aim of our paper is to provide a primer on the foundations of the theory of intergovernmental grants, suitable for newcomers to this active field of research. In addition, we provide a selective survey of recent theoretical papers on grants, focusing particularly on non-cooperative...