Commodity taxes and taste heterogeneity

Stephane Gauthier and Fanny Henriet

Post-Print from HAL

Abstract: We study optimal linear commodity taxes in the presence of non-linear income taxes when agents differ in skills and tastes for consumption. We show that optimal commodity taxes are partly determined by a many-person Ramsey rule when there is taste heterogeneity within income classes. The usual role of commodity taxes in relaxing incentive constraints explains the remaining part of these taxes when there is taste heterogeneity between income classes. We quantify these two parts using French consumption microdata and find that commodities taxes are only shaped by many-person Ramsey considerations.

Keywords: Taste heterogeneity; Income taxation; Commodity taxes; Social valuations (search for similar items in EconPapers)
Date: 2018-01
New Economics Papers: this item is included in nep-mkt and nep-pbe
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01626787v1
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Published in European Economic Review, 2018, 101, pp.284-296. ⟨10.1016/j.euroecorev.2017.10.017⟩

Downloads: (external link)
https://shs.hal.science/halshs-01626787v1/document (application/pdf)

Related works:
Journal Article: Commodity taxes and taste heterogeneity (2018)
Working Paper: Commodity taxes and taste heterogeneity (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01626787

DOI: 10.1016/j.euroecorev.2017.10.017

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().