This study approaches the subject of tax reform from basic economic principles. The objectives are to develop guidelines for the design of tax policy; to show how the principles can structure systematic research into tax reform in terms of the consequences for households, producers and government; and finally, to combine the guidelines and applied research into a practical tax package for Pakistan, where tax reform has become an urgent priority. Professors Ahmad and Stern provide a coherent framework to show how principles can be formulated, applied research structured, and policies developed...