On the Equivalence between Labor and Consumption Taxation

Paolo Panteghini

No 2593, CESifo Working Paper Series from CESifo

Abstract: This article studies the equivalence between labor and consumption taxes in a stochastic context, where the government can undertake an active portfolio management strategy by investing in both risk-free and risky assets. Using a two-period model we show that such taxes let consumers make the same decisions, and can finance the same amount of government spending in each period.

Keywords: consumption and labor taxation; equivalence; risk (search for similar items in EconPapers)
JEL-codes: H24 (search for similar items in EconPapers)
Date: 2009
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Related works:
Journal Article: On the equivalence between labor and consumption taxation (2009)
Working Paper: On the Equivalence between Labor and Consumption Taxation (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2593

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