Lump-sum over Distortionary Taxation Dominance with Heterogeneous Individuals

Ramon Torregrosa-Montaner ()
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Ramon Torregrosa-Montaner: Universidad de Salamanca

Economics Bulletin, 2015, vol. 35, issue 3, 1443-1449

Abstract: The dominance of lump-sum over distortionary taxation for the single consumer case is a well-known proposition in microeconomics. This result implies that if the consumer is asked about what tax she would pay to bear a given tax burden, she would choose lump-sum taxation. This paper provides a version of this dominance of lump-sum taxation for the case of several heterogeneous individuals by means of a game where the government allows each individual to choose between the two tax regimes.

Keywords: Lump-sum taxation; distortionary taxation; pure strategy Nash equilibrium. (search for similar items in EconPapers)
JEL-codes: H3 (search for similar items in EconPapers)
Date: 2015-07-11
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