Arbeitspapier
Optimal Utilitarian Taxation and Horizontal Equity
We impose a horizontal equity restriction on the problem of finding the optimal utilitarian tax mix. The horizontal equity constraint requires that individuals with the same ability have to pay the same amount of taxes regardless of their preferences for leisure. Contrary to normal findings, we find that a good that is complementary to leisure can be encouraged by the tax system, and that a good that normally should be discouraged by the tax system can be subsidized even if the economy is composed of only two private commodities plus leisure. Also, the marginal effective tax rate can be different from zero at the top (of the ability distribution) when the tax mix obeys the horizontal equity constraint.
- Language
-
Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 977
- Classification
-
Wirtschaft
- Subject
-
horizontal equity
optimal taxation
heterogeneous preferences
utilitarianism
- Event
-
Geistige Schöpfung
- (who)
-
Jordahl, Henrik
Micheletto, Luca
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2003
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Jordahl, Henrik
- Micheletto, Luca
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2003
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Efficiency and equity aspects of energy taxation
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