Template-Type:ReDIF-Paper 1.0  
Title:Efficient Public Good Provision with Nonlinear Income Taxation 
Author-Name: Gaube, Thomas
Classification-JEL:H41, H21
Keywords: 	income taxation, public goods 
Abstract: Due to the use of distortionary taxation, real-world 
	economies should attain a lower level of public
	expenditures than one might suspect from the analysis 
	of artificial models where lump-sum taxes are assumed
	to be available. The paper examines this popular 
	hypothesis by means of the two-type self-selection model of
	income taxation. I provide sufficient conditions for 
	both a lower and a higher level of public expenditures in
	second best than in first best. Contrary to conventional 
	intuition, these results do not in the first place depend on
	whether the (second-best) income tax is distortive, but 
	on whether public expenditures reduce the incentive of
	high-ability agents to imitate less productive individuals. 
Creation-Date: 
Revision-Date: 1999-04
Handle: RePEc:bon:bonsfa:595