A Case for Taxing Education

Tomer Blumkin () and Efraim Sadka ()
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Tomer Blumkin: Department of Economics Ben-Gurion University, Israel
Efraim Sadka: The Eitan Berglas School of Economics, Tel Aviv University

No 521, Working Papers from Ben-Gurion University of the Negev, Department of Economics

Abstract: In this paper we establish, contrary to conventional wisdom, a case for taxing education, as a supplement to the labor income tax, by drawing on some informational feature of education, which the government may utilize. Discretionary decisions of individuals to acquire education may serve as an additional signal (to earned labor income) on the underlying unobserved innate earning ability, thereby mitigating the informational constraint faced by the government.

Keywords: Optimal Taxation; Re-distribution; Education; Inequality (search for similar items in EconPapers)
JEL-codes: D6 H2 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2005
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:bgu:wpaper:0521

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