Arbeitspapier
The costs of taxation in the presence of inequality
This paper provides a new and improved measure of the marginal cost of public funds (MCF). It is based on a benchmark tax which is distributionally neutral and non-distortive. This is in contrast to the MCF-measure used in the previous literature, that has used the regressive uniform lump-sum tax as the benchmark. Our proposed MCF-measure more precisely accounts for the distributional aspects of public funding (the tax scheme) and makes a clear distinction between this and the distributional aspects of the public good considered. Compared to the previous literature, we find a higher MCF both in the case of a uniform lump-sum tax and in the case of distortive taxes. Due to its regressive distributional consequences, we find that the MCF of a uniform lump-sum tax is always greater than one when not combined with distortive taxes. Moreover, we find that the MCF could be greater than one also with an optimal combination of a uniform lump-sum tax and distortive taxes.
- Sprache
-
Englisch
- Erschienen in
-
Series: Discussion Papers ; No. 908
- Klassifikation
-
Wirtschaft
Taxation, Subsidies, and Revenue: General
Publicly Provided Goods: General
National Government Expenditures and Related Policies: General
- Thema
-
Marginal cost of public funds
lump-sum taxes
public goods
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Valseth, Åsmund Sunde
Holtsmark, Bjart
Holtsmark, Katinka
- Ereignis
-
Veröffentlichung
- (wer)
-
Statistics Norway, Research Department
- (wo)
-
Oslo
- (wann)
-
2019
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Valseth, Åsmund Sunde
- Holtsmark, Bjart
- Holtsmark, Katinka
- Statistics Norway, Research Department
Entstanden
- 2019
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