A Generalization of the Atkinson-Stiglitz (1976) Theorem on the Undesirability of Nonuniform Excise Taxation

Martin Hellwig

No 2008_47, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: The Atkinson-Stiglitz (1976) theorem on the undesirability of nonuniform excise taxation when all agents have homogeneous, separable preferences is extended to allow for nonseparability with respect to endogenous variables that will be subject to distortions. The result is useful for analysing models with production and education. For such models, the conclusion of Bovenberg and Jacobs (2005), that it is desirable to distort production rather than education choices, is shown to be reversed if the hidden characteristic affects the cost of education rather than productivity.

Keywords: Optimal Taxation; Atkinson-Stiglitz Theorem (search for similar items in EconPapers)
JEL-codes: H21 (search for similar items in EconPapers)
Date: 2008-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: A generalization of the Atkinson-Stiglitz (1976) theorem on the undesirability of nonuniform excise taxation (2010)
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