The purpose of this book is to introduce the substantial literature on consumption tax policy and the taxation of capital income, the early literature on optimal tax theory in dynamic overlapping generations models, the more recent literature on optimal taxation in the Ramsey growth model and models of endogenous growth, and the literature on taxation in open economies. The authors summarize the main arguments for and against consumption taxation, present the main theoretical and empirical results of the technical literature, and, finally, extend the literature in a number of useful ways by complicating the models used to study tax issues. These extensions include bequeathing behavior, the time consistency problem, the capital levy, charity and privately produced public goods, environmental externalities and renewable resources, durable goods and land, and money used in exchange and as an asset. Chapters are self-contained as far as possible, and each uses a variety of models rather than just one to study the issue at hand. Models and notation are explained each time they are used, so that the reader can open the book at any chapter without needing to refer back to earlier discussions. The book will be of value to specialists working on tax policy and to the general economist interested in a broad survey of research on tax policy. It will also be useful for students interested in learning how research on tax issues is done, especially the technical aspects of manipulating models, deriving predictions, as well as bringing theory and empirical tools to bear on tax policy issues.