General Equilibrium with Taxes
This paper proves the existence of general equilibrium in a large class of models which include taxes and similar distortions. A wide range of taxes are compatible with the existence of general equilibrium. These include taxes on income, consumption, and production which may discriminate among individuals or firm, and certain types of trade union and monopoly behaviour. It is shown that, in general, proportional and progressive taxes are compatible with equilibrium, but regressive ones may not be.
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|Date of creation:||1976|
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