Optimal Taxation with Household Production

Henrik Jacobsen Kleven, Wolfram Richter and Peter Birch Sørensen

No 99-12, EPRU Working Paper Series from Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics

Abstract: This paper suggests that the optimal tax system should favour market-produced services which are close substitutes for home-produced services. First, we modify the classical Corlett-Hague rule for optimal commodity taxation by showing that it may be optimal to impose a relatively low tax rate on consumer services even if such services are complements to leisure. Second, we find that when services and other goods are equally substitutable for leisure, so that uniform commodity taxation would be optimal in the absence of home production, the optimal tax structure will certainly involve a relatively low tax rate on consumer services.

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

Downloads: (external link)
http://web.econ.ku.dk/epru/files/wp/wp9912.PDF (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://web.econ.ku.dk/epru/files/wp/wp9912.PDF [301 Moved permanently]--> https://web.econ.ku.dk/epru/files/wp/wp9912.PDF)

Related works:
Journal Article: Optimal Taxation with Household Production (2000)
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:kud:epruwp:99-12

Access Statistics for this paper

More papers in EPRU Working Paper Series from Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics �ster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Hoffmann (thho@kb.dk).