Optimal taxation, critical-level utilitarianism and economic growth (original) (raw)

In this work we analyze the issue of taxation in an intertemporal economy with endogenous fertility under critical-level utilitarianism, both from a positive and normative standpoint. On the positive side we analyse the effects of a change in the tax on capital income and on the population size, both separately and in a policy aiming at maintaining per-capita debt constant. On the normative side, we characterize the first-best and secondbest optimal tax structures both when labour supply is exogenous and endogenous.