Problem
Clarified question from 14-5, Rosen (1988), 2"d edition; 14-5. Rosen (1998), sth ed. Refer to Harberger's general equilibrium model covered diagrammatically in lecture and which was presented in the previous chapter (Chap. 14 Taxation and Income Distribution'). In that model, there are two commodities and two factors of production, and the total supply of each factor of production is fixed. We have shown that the differential taxation of capital inputs results in an excess burden using the example of a tax on capital imposed in the corporate sector but not imposed in the noncorporate sector. What is the excess burden of a proportional factor income tax? What is the excess burden of a proportional tax on one of the two factors?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.