Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263938 
Authors: 
Year of Publication: 
2022
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2022-018/VI
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
I characterize the optimal linear commodity taxes when households differ in multiple characteristics, in presence of an optimal non-linear tax schedule on the households' labour incomes. The optimal distortions caused by a linear commodity tax are larger if, conditional on labour income, more deserving in- dividuals consume more of that commodity. This is the case for merit goods, or if the government otherwise seeks to compensate individuals who consume larger quantities of that commodity. Furthermore, the government wishes to tax commodities at different rates to the extent that doing so reduces the dis- tortions caused by the labour income tax. This is the case when individuals with different incomes have different preferences, or when individuals who sup- ply different quantities of labour have different consumption patterns. I extend these findings to the case where households earn multiple incomes.
Subjects: 
optimal commodity taxation
multidimensional taxation
JEL: 
H21
H24
Document Type: 
Working Paper

Files in This Item:
File
Size
416.17 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.