The Tax Controversy or, Should We Forsake Indirect Taxation? A Survey of the Literature
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Abstract
We revise the more recent advances in the literature about the so called "direct versus indirect controversy". In particular, we show how the result of "uniform commodity tax under non-linear income taxation" by Atkinson and Stiglitz (1976) has been amended in some contributions that recovers a role for in direct taxation as an instrument of optimal tax policy even in the case where agents' preferences are weakly separable between leisure and other goods.
