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Sin goods taxation: an encompassing model

Maria Alessandra Antonelli, Valeria De Bonis, Angelo Castaldo and Alessandro Gandolfo ()
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Alessandro Gandolfo: Università Sapienza di Roma - Dipartimento di Studi Giuridici, Filosofici ed Economici

No 52, Public Finance Research Papers from Istituto di Economia e Finanza, DSGE, Sapienza University of Rome

Abstract: We analyse optimal sin taxes. After identifying the distinctive features of sin goods, we develop a simple, encompassing framework that allows to treat the main models found in the literature as subcases. We derive the optimal sin tax rates, also considering the subsidisation of healthy goods. We then discuss the Pareto-improvement result obtained in the theoretical literature, confronting it with the debate on the regressivity of this kind of taxation. We highlight the crucial role of the interaction of tastes, self-control problems and poverty when deriving policy conclusions from theoretical models.

Keywords: Sin goods; Optimal taxation; Tax burden; Consumer sovereignty. (search for similar items in EconPapers)
JEL-codes: D11 H21 H22 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2022-04
New Economics Papers: this item is included in nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:gfe:pfrp00:00052

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