This paper discusses the principles and practices of dual income taxation in the Nordic countries. The first part of the paper explains the rationale and the historical background for the introduction of the dual income tax and describes the current Nordic tax practices. The second part of the...

The paper studies the dynamic macroeconomic effects of various forms of capital income taxation in a model of a small open economy with perfect mobility of financial capital and intertemporal optimization on the part of households and firms. One of the noteworthy results is that the introduction...

The paper develops a model of endogenous economic growth, where sustainable growth is driven by private capital accumulation and productive government spending on education and pollution abatement. The economy is distorted by pollution externalities in production and consumption; by taxes and...

We set up a model of public service provision to study the factors determining whether outsourcing to for-profit and not-for-profit producers of social services will enable a local government to achieve a given service quality at lower budgetary cost. Outsourcing provides an incentive for...

This paper suggests that the optimal tax system should favour market-produced services which are close substitutes for home-produced services. First, we modify the classical Corlett-Hague rule for optimal commodity taxation by showing that it may be optimal to impose a relatively low tax rate on...

Advances in information technology have improved the administrative feasibility of redistribution based on lifetime earnings recorded at the time of retirement. We study optimal lifetime income taxation and social insurance in an economy in which redistributive taxation and social insurance...

The European Commission recently proposed to move towards a consolidated tax base for European multinational companies, to be allocated across EU member states through a system of formula apportionment. This paper argues that while the Commission’s four alternative blueprints for company tax...

We set up a probabilistic voting model to explore the hypothesis that tax competition improves public sector efficiency and social welfare. In the absence of tax base mobility, distortions in the political process induce vote-maximising politicians to create rents to public sector employees....

In the year 2000 Germany enacted a major tax reform involving significant cuts in corporate and personal tax rates and a controversial change in the system of dividend taxation. This paper discusses the effects of the business tax reform on the German economy. The analysis is based on a detailed...

We set up a probabilistic voting model to explore the hypothesis that tax competition improves public sector efficiency and social welfare. In the absence of tax base mobility, distortions in the political process induce vote-maximising politicians to create rents to public sector employees....