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On the Assumptions of the Optimal Taxation Problem: Is Distortionary Taxation a Burden or a Blessing?

I consider a reasonable deviation from the standard assumptions in the optimal taxation literature on public consumption and show that the results on the optimal taxes are substantially altered. In particular, `distortionary' taxes may be optimal after all. This reveals that, in contrast to the common practice, the analysis of optimal taxation cannot be done independently of the analysis of the optimal public provision of goods and services.
Year of publication:
2009
Authors: Teles, Pedro
Institutions: Society for Economic Dynamics - SED
Extent:
application/pdf
Series:
Type of publication: Book / Working Paper
Notes:
The text is part of a series 2009 SED Meeting Papers Number 926
Source:
Persistent link: https://www.econbiz.de/10011080575
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