Taxation When Consumers Value Freedom

Amihai Glazer and T. Cowen

Working Papers from California Irvine - School of Social Sciences

Abstract: We propose that people value not only the goods they consume, but also their freedom, which increases with the number of bundles their budget allows them to buy. We apply this idea to show that citizens may favor proportional taxes over lump-sum taxes, progressive taxes over proportional taxes, quantity rationing over price increases, and fixed fees over prices reflecting marginal production costs.

Keywords: CONSUMPTION; BUDGET; TAXATION; PRICES (search for similar items in EconPapers)
JEL-codes: E21 H22 H24 (search for similar items in EconPapers)
Date: 2001

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Persistent link: http://EconPapers.repec.org/RePEc:fth:calirv:00-01-31

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