Redistribution and the marginal Cost of Public Funds

Agnar Sandmo

Working Papers from Norwegian School of Economics and Business Administration-

Abstract: Discussion of the marginal cost of public funds with distortionary taxation are often cast in the framework of a one-consumer economy, while the main justification of distortionay taxes is that they are needed for distribution. This paper analyzes the issue in a model with heterogeneous consumers and a linear income tax, focusing on the tradeoff between labour market distortions and the redistribution from high-wage to low-wage workers.

Keywords: FISCAL POLICY; PUBLIC GOODS (search for similar items in EconPapers)
JEL-codes: D61 H21 H41 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1997
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Redistribution and the marginal cost of public funds (1998)
Working Paper: Redistribution and the Marginal Cost of Public Funds (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:norgee:8/97

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