In this paper we examine the importance of imperfect competition in product and labour markets in determining the long-run welfare effects of tax reforms assuming agent heterogeneneity in capital holdings. Each of these market failures, independently, results in welfare losses for at least a segment of the population, after a capital tax cut and a concurrent labour tax increase. However, when c...

We study reforms of nonlinear income tax systems from a political economy perspective. present median voter theorem for monotonic reforms, so that the change in burden is function income. also provide an empirical analysis with focus on United States. show past have, by and large, been monotonic. support was aligned majority population. Finally, we develop sufficient statistics enable to test w...