Some Marginalist Intuition Concerning the Optimal Commodity Tax Problem

Craig Brett

The Journal of Economic Education, 2006, vol. 37, issue 4, 459-469

Abstract: The author offers a simple intuition that can be exploited to derive and to help interpret some canonical results in the theory of optimal commodity taxation. He develops and explores the principle that the marginal social welfare loss per last unit of tax revenue generated be equalized across tax instruments. A simple two-consumer, two-taxed-commodity economy is used to explore how this intuition can be used to derive the famous inverse elasticity rule, as well as the modifications and extensions needed to account for the redistributive effects of commodity taxes.

Date: 2006
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.3200/JECE.37.4.459-469 (text/html)
Access to full text is restricted to subscribers.

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:taf:jeduce:v:37:y:2006:i:4:p:459-469

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/VECE20

DOI: 10.3200/JECE.37.4.459-469

Access Statistics for this article

The Journal of Economic Education is currently edited by William Walstad

More articles in The Journal of Economic Education from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().