International Tax and Public Finance

, Volume 14, Issue 4, pp 383–406 | Cite as

The theory of optimal taxation: what is the policy relevance?



The paper discusses the implications of optimal tax theory for the debates on uniform commodity taxation and neutral capital income taxation. While strong administrative and political economy arguments in favor of uniform and neutral taxation remain, recent advances in optimal tax theory suggest that the information needed to implement the differentiated taxation prescribed by optimal tax theory may be easier to obtain than previously believed. The paper also points to the strong similarity between optimal commodity tax rules and the rules for optimal source-based capital income taxation.


Optimal taxation Uniform taxation Tax neutrality 


H21 H25 


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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of Copenhagen, EPRU og CESifoCopenhagenDenmark

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