EconPapers    
Economics at your fingertips  
 

Optimal taxation in a growth model with public consumption and home production

Jie Zhang (), James Davies (), Jinli Zeng () and Stuart McDonald ()

No 1707, MRG Discussion Paper Series from School of Economics, University of Queensland, Australia

Abstract: In a neoclassical growth model with public consumption, we show the following Pareto optimal tax rules. The government should tax leisure and private consumption at the same rate, and subsidize net investment at the same rate it taxes net capital income. Also, it should tax capital income more heavily than labor income. In an extension for home production, the additional rule is to tax investment for home production at the same rate of the tax on private market consumption. These tax and subsidy rates should be constant over time except the initial tax rate on capital income.

New Economics Papers: this item is included in nep-dge, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.uq.edu.au/economics/mrg/1707.pdf (application/pdf)

Related works:
Journal Article: Optimal taxation in a growth model with public consumption and home production (2008) Downloads
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:qld:uqmrg6:17

Access Statistics for this paper

More papers in MRG Discussion Paper Series from School of Economics, University of Queensland, Australia Contact information at EDIRC.
Bibliographic data for series maintained by SOE IT ().

 
Page updated 2020-08-05
Handle: RePEc:qld:uqmrg6:17