Renes, Sander; Zoutman, Floris T. - Institutt for foretaksøkonomi, Norges Handelshøyskole … - 2014
This paper studies the design of tax systems that implement a planner's secondbest allocation in a market economy. An example shows that the widely used Mirrleesian (1976) tax system cannot implement all incentive-compatible allocations. Hammond's (1979) "principle of taxation" proves that any...