Intergenerational Allocation of Government Expenditures : Externalities and Optimal Taxation

• Tác giả: Kazi Iqbal
• Ngôn ngữ: eng
• Ký hiệu phân loại: 336.2 Taxes
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 302803
• Chủ đề: 1. Business Taxes and Subsidies including sales and value-added (VAT) H250; 2. includes inheritance and gift taxes H240; 3. Optimal Taxation H210; 4. Personal Income and Other Nonbusiness Taxes and Subsidies; 5. Taxation and Subsidies: Efficiency

Tóm tắt

This paper studies optimal capital and labor income taxes when the benefits of public goods are age-dependent. Provided the government can impose a consumption tax, it can attain the first-best resource allocation. This involves the uniform taxation of the cohorts' labor income and a zero capital income tax. With no consumption tax and optimally chosen government spending, labor income should be taxed nonuniformly across cohorts and the capital income tax should be nonzero. Deviations of the public goods from their respective optima create distortions. These affect the labor supply decisions of both cohorts and capital accumulation, providing a further reason to tax (or subsidize) capital income.