Tax Policy with Uncertain Future Costs: Some Simple Models

Christopher Ball and John Creedy

No 13/07, Treasury Working Paper Series from New Zealand Treasury

Abstract: This paper considers the extent to which the standard argument, that the disproportionate excess burden of taxation suggests the use of tax-smoothing in the face of future cost increases, is modified by uncertainty regarding the future. The role of uncertainty and risk aversion are examined using several highly simplified models involving a possible future contingency requiring an increase in tax-financed expenditure.

Keywords: Tax Smoothing; Uncertainty; Risk Aversion; Excess Burden (search for similar items in EconPapers)
JEL-codes: D81 D90 H20 (search for similar items in EconPapers)
Pages: 21
Date: 2013-04
New Economics Papers: this item is included in nep-pbe and nep-pub
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Tax policy with uncertain future costs: Some simple models (2014)
Working Paper: Tax Policy with Uncertain Future Costs: Some Simple Models (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:nzt:nztwps:13/07

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