Optimal Commodity Taxation Assume that the goal is to finance expenditures with a minimum of excess burden Assume lump sum taxes are infeasible ·3 commodities Good x.y and leisure Prices Px, Py, and w2 Optimal Commodity Taxation • Assume that the goal is to finance expenditures with a minimum of excess burden. • Assume lump sum taxes are infeasible. • 3 commodities: – Good X, Y, and leisure – Prices PX , PY , and w