A note on the link between public expenditures and distortionary taxation

This note deals with the optimal provision of a public good in the context of the Ramsey tax model. It is shown that the second-best level of public good provision is inefficiently low relative to a situation where additional expenditures can be financed by lump-sum taxation.

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Year of publication:	2007-10-04
Authors:	Gaube, Thomas
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 8.2007, 9, p. 1-10
Publisher:	AccessEcon
Subject:	distortionary taxation

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Extent:	application/pdf
Type of publication:	Article
Classification:	H4 - Publicly Provided Goods ; H2 - Taxation, Subsidies, and Revenue
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010629291