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Individuals pay a proportionaltax on labor income and at the same time they either pay a lump-sum tax or receive a lumpsum transfer.
The voucher is financed through the proportionaltax revenues raised for the public school.
Since the proportionaltax burden on capital is varied while holding government's proportional claim to output constant, the tax burden on the remaining factors changes to balance the budget.
We show that monetary equilibria with an inflation tax are equivalent to social security equilibria in which the government levies a proportionaltax on social security benefits.
In the band of income that we are debating, it is a proportionaltax.
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