Yet another reason to tax goods

Carlos Eugênio da Costa ()

No 596, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: The optimal taxation of goods, labor and capital income is considered in a two period model where: i) private information changes through time; ii) savings are not observed, and; iii) savings a§ect preferences conditional on the realization of types. The simultaneous appearance of these three elements cause optimal commodity taxes to depend on o§-equilibrium savings. As a consequence, separability no longer su¢ ces for the uniform taxation prescription of Atkinson and Stiglitz (AS) to obtain. If preferences are homothetic AS is partially restored: taxes are uniform within periods, however, future consumption is taxed at a higher rate than current consumption.

Date: 2005-07-01
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Related works:
Journal Article: Yet Another Reason to Tax Goods (2009)
Working Paper: Yet Another Reason to Tax Goods (2006)
Working Paper: Yet Another Reason to Tax Goods (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:596

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