EconPapers    
Economics at your fingertips  
 

Tax buyouts

Marco Del Negro, Fabrizio Perri and Fabiano Schivardi

Journal of Monetary Economics, 2010, vol. 57, issue 5, 576-595

Abstract: The paper studies a fiscal policy instrument that can reduce fiscal distortions without affecting revenues, in a politically viable way. The instrument is a private contract (tax buyout), offered by the government to each citizen, whereby the citizen can choose to pay a fixed price in exchange for a given reduction in her tax rate for a period of time. We introduce the tax buyout in a dynamic overlapping generations economy, calibrated to match several features of the US income, taxes and wealth distribution. Under simple pricing, the introduction of the buyout is revenue neutral but, by reducing distortions, benefits a significant fraction of the population and leads to sizable increases in aggregate labor supply, income and consumption.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304-3932(10)00067-X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Tax Buyouts (2010) Downloads
Working Paper: Tax buyouts (2010) Downloads
Working Paper: Tax buyouts (2010) Downloads
Working Paper: Tax buyouts (2010) Downloads
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:eee:moneco:v:57:y:2010:i:5:p:576-595

Access Statistics for this article

Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-31
Handle: RePEc:eee:moneco:v:57:y:2010:i:5:p:576-595