Sammendrag
The paper derives formulas for optimal taxation in a stylized Applied General Equilibrium (AGE) model, and shows their potential empirical significance. Because of the Armington-assumption for exports and imports, the formulas are quite different from those of the 'textbook' model of optimal taxation. As a result, tax reforms that increase welfare in the 'textbook' model, may not do so in the AGE model. An empirical example for Norway is given.