Public goods and optimal income taxation
Previous optimal income tax studies have generally ignored government expenditures as a policy tool for affecting distribution. Using simulations, this article analyzes the properties of the optimal linear income tax where both public and private consumption enter individuals' utility functions.
Moreland, K. (1984). Public goods and optimal income taxation. Public Finance Quarterly, 12(2), 197–212. doi:10.1177/109114218401200205