Labor and Capital Taxation with Public Inputs as Common Property
Bibliographic record
Abstract
The services of many public inputs (e.g., dams, irrigation systems, and highways) are provided to private firms on a free-access basis. If these services enter constant-returns-to-scale production functions then there are decreasing returns to scale in the private factors. Thus a change in the amount of a public input gives rise to positive rent or economic profit in the first instance. The authors extend the literature by recognizing that this rent cannot be an equilibrium phenomenon. Private agents will engage in rent-seeking that will ultimately lead to dissipation. This makes a public input equivalent to a common property resource, which, in the absence of the appropriate price or quantity rationing, gives rise to inefficiency. Using a model with capital and labor as private inputs, the authors show it is optimal to tax capital even though a labor tax is available and capital is internationally mobile. Production efficiency also holds since our policy supports the first-best equilibrium despite decreasing returns to scale in private inputs.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".