On the undesirability of commodity taxation even when income taxation is not optimal
By: Louis Kaplow.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10407; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10407.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Taxation of articles of consumption -- Econometric models.
Description: "An important result due to Atkinson and Stiglitz (1976) is that differential commodity taxation is not optimal in the presence of an optimal nonlinear income tax (given weak separability of utility between labor and all consumption goods).  This article demonstrates that their conclusion holds regardless of whether the income tax is optimal.  In particular, given any commodity tax and income tax system, differential commodity taxation can be eliminated in a manner that results in a Pareto improvement.  Also, differential commodity taxation can be proportionally reduced so as to generate a Pareto improvement.  In addition, for commodity tax reforms that do not eliminate or proportionally reduce differential taxation, a simple efficiency condition is offered for determining whether a Pareto improvement is possible"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/13/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.