The optimal mix of taxes on money, consumption and income

Fiorella De Fiore () and Pedro Teles ()

No 135, Working Paper Series from European Central Bank

Abstract: In this paper we determine the optimal combination of taxes on money, consumption and income in transactions technology models. We show that the optimal policy does not tax money, regardless of whether the government can use the income tax, the consumption tax, or the two taxes jointly. These results are at odds with recent literature. We argue that the reason for this divergence is an inappropriate specification of the transactions technology adopted in the literature. JEL Classification: E31; E41; E58; E62.

Keywords: Friedman rule; inflation tax; transactions technology. (search for similar items in EconPapers)
Date: 2002-04
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Related works:
Journal Article: The optimal mix of taxes on money, consumption and income (2003)
Working Paper: The Optimal Mix of Taxes on Money, Consumption and Income (2002)
Working Paper: The optimal mix of taxes on money, consumption and income (2002)
Working Paper: The Optimal Mix Of Taxes on Money, Consumption and Income (1999)
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