Income Distribution, Taxation, and the Private Provision of Public Goods

Jun‐Ichi Itaya, David de Meza and Gareth D. Myles

Journal of Public Economic Theory, 2002, vol. 4, issue 3, 273-297

Abstract: This article investigates the role of taxation when public goods are privately provided. Externalities between consumers via the public good are shown to cause kinks in social indifference curves. As a result, a government restricted to income taxation should engineer enough inequality to ensure there are some non‐contributors to the public good. Whether commodity taxation changes this conclusion depends on the extent to which consumers “see through” the government budget constraint. If they can, inequality should still be sought. When they cannot, in contrast to the case of an economy with only private goods, commodity taxation can be used in conjunction with income transfers to achieve the first‐best.

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://doi.org/10.1111/1467-9779.00098

Related works:
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:bla:jpbect:v:4:y:2002:i:3:p:273-297

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1097-3923

Access Statistics for this article

Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

More articles in Journal of Public Economic Theory from Association for Public Economic Theory Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().