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Göteborgs universitets publikationer

Social Comparisons and Optimal Taxation in a Small Open Economy

Författare och institution:
Thomas Aronsson (-); Olof Johansson-Stenman (Institutionen för nationalekonomi med statistik); Tomas Sjögren (-)
Utgiven i serie vid Göteborgs universitet:
Working Papers in Economics (online), ISSN 1403-2465
ISSN:
1403-2465
Antal sidor:
34
Publikationstyp:
Rapport
Förlag:
University of Gothenburg
Förlagsort:
Göteborg
Publiceringsår:
2016
Språk:
engelska
Fulltextlänk:
Sammanfattning (abstract):
Almost all previous studies on optimal taxation and status consumption are based on closed model-economies. This paper analyzes how international capital mobility – which may constrain the use of capital income taxation – affects the optimal redistributive income tax policy in a small open economy when consumers care about their relative consumption. If the government can perfectly observe (and tax) returns on savings abroad, it is shown that the policy rules for marginal labor and capital income taxation derived for a closed economy largely carry over to the small open economy analyzed here. However, if these returns are unobserved by the government, the marginal tax policy rules will be very different from those pertaining to closed model-economies. In this case, capital income taxes on domestic savings will be completely ineffective, since such taxes would induce the consumers to move their savings abroad. The labor income tax must then indirectly also reflect the corrective purpose that the absent capital income tax would otherwise have had.
Ämne (baseras på Högskoleverkets indelning av forskningsämnen):
SAMHÄLLSVETENSKAP ->
Ekonomi och näringsliv ->
Nationalekonomi
Nyckelord:
Optimal taxation, relative consumption, positional goods, capital mobility, small open economy
Postens nummer:
237400
Posten skapad:
2016-06-07 14:03

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