@article{Kanbur:250018,
      recid = {250018},
      author = {Kanbur, Ravi and Pirttila, Jukka and Tuomala, Matti and  Ylinen, Tuuli},
      title = {OPTIMAL TAXATION AND PUBLIC PROVISION FOR POVERTY  REDUCTION},
      address = {2015-07},
      number = {642-2016-44170},
      series = {WP},
      pages = {36},
      year = {2015},
      abstract = {The existing literature on optimal taxation typically  assumes there exists a capacity to implement
complex tax  schemes, which is not necessarily the case for many  developing countries. We
examine the determinants of  optimal redistributive policies in the context of a  developing
country that can only implement linear tax  policies due to administrative reasons. Further,  the
reduction of poverty is typically the expressed goal of  such countries, and this feature is also
taken into account  in our model. We derive the optimality conditions for  linear income taxation,
commodity taxation, and public  provision of private and public goods for the  poverty
minimization case, and compare the results to those  derived under a general welfarist objective
function. We  also study the implications of informality on optimal  redistributive policies for such
countries, and comment on  the potential for minimum wage regulation. The exercise  reveals
non-trivial differences in optimal tax rules under  the different assumptions. The derived formulae
also  capture the sufficient statistics that the governments need  to pay attention to when designing
poverty alleviation  policies.},
      url = {http://ageconsearch.umn.edu/record/250018},
      doi = {https://doi.org/10.22004/ag.econ.250018},
}