wage tax应该在工资水平上加吧，RMT上说最优的capital tax和wage tax应该在极限状态为0，以免造成供给的扭曲。EXP TAX是对消费征税吧，应该不会扭曲供给。

Thx

I duno what is RMT, could u tell me the full name of it? :)

About the Wage Tax and Expenditure Tax, I just duno why wage tax only focus on the labor (in our handout, it says Y=K+L and Labor is the one to be taxed)
but as to Exp Tax, the gov tax the rest after Income minus Investment which i think can encourage people to invest in the capital.

Porfessor says Exp Tax is better cuz it has larger tax base and better social fairness. I dont get it.
Do u hv any idea about that?

Many thanks.
Sorry for all those words are in english cuz we dont hv chinese in lib>_<

RMT refers to the book "Recursive Macroeconomic Theory" by Tom Sargent.

In my opinion,labor tax is equivalent to the case of a relatively low wage rate, which makes the agent devote less working hours.  Therefore, the output of the economy shrinks. Exp Tax certainly has a larger tax base, because it has no effect on capital or labor supply.

If possible, could you send me a PDF or DOC version of your handout? My email address is wangchuand@yahoo.com.cn

Thanks.