A Pareto-improving commodity tax reform under a smooth nonlinear income tax

摘要: Abstract This paper analyzes the welfare effects of commodity tax reform in an economy with a nonlinear income and linear taxes. The main result is that we can find program improves every consumer's utility Pareto sense unless efficiency loss minimized under incentive compatibility. rule proposed here applies to broad class economies arbitrary smooth expenditure function approach makes our analyses clear simple. Some intuition presented on role taxation mixed economy. relationship previous work optimal theory also discussed. We extend case where government spends revenue provide public good.