This Handbook entry presents a conceptual, normative overview of the subject of taxation. It emphasizes the relationships among the main functions of taxation -- notably, raising revenue, redistributing income, and correcting externalities -- and the mapping between these functions and various forms of taxation. Different types of taxation as well as expenditures on transfers and public goods are each integrated into a common optimal tax framework with the income tax and commodity taxes at the core. Additional topics addressed include a range of dynamic issues, the unit of taxation, tax administration and enforcement, and tax equity.
Document Object Identifier (DOI): 10.3386/w12061
Published: Polinsky, A. Mitchell and Steven Shavell (eds.) HANDBOOK OF LAW AND ECONOMICS vol. 1. Amsterdam :Elsevier, 2007.
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