Time Consistent Taxation by a Government with Redistributive Goals
dc.contributor.author | Stacchetti, Ennio | en_US |
dc.contributor.author | Pearce, David | en_US |
dc.date.accessioned | 2013-11-14T23:22:28Z | |
dc.date.available | 2013-11-14T23:22:28Z | |
dc.date.issued | 1993-03 | en_US |
dc.identifier.other | MichU DeptE CenREST W93-13 | en_US |
dc.identifier.other | H230 | en_US |
dc.identifier.other | H210 | en_US |
dc.identifier.other | E610 | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/100989 | |
dc.description.abstract | In a dynamic economy whose government is interested in both equity and efficiency, time consistency problems arise even if the government has access to nondistortionary tax instruments. Moral hazard in production leads to a nondegenerate distribution of income, which the government would like to "flatten" ex post. Self-enforcing social agreements can mitigate the tendency toward excessive redistribution. We investigate the nature of the distortions caused by the time consistency problem, and show that in the constrained-optimal equilibrium, usually a linear tax schedule is imposed. This remains true if renegotiation of the social agreement is possible. | en_US |
dc.description.sponsorship | Center for Research on Economic and Social Theory, Department of Economics, University of Michigan | en_US |
dc.relation.ispartofseries | Working Paper | en_US |
dc.subject | Time Consistency | en_US |
dc.subject | Nondistortionary Tax Instruments | en_US |
dc.subject | Linear Tax Schedule | en_US |
dc.subject.other | Taxation and Subsidies: Externalities | en_US |
dc.subject.other | Redistributive Effects | en_US |
dc.subject.other | Environmental Taxes and Subsidies | en_US |
dc.subject.other | Taxation and Subsidies: Efficiency | en_US |
dc.subject.other | Optimal Taxation | en_US |
dc.subject.other | Policy Objectives | en_US |
dc.subject.other | Policy Designs and Consistency | en_US |
dc.subject.other | Policy Coordination | en_US |
dc.title | Time Consistent Taxation by a Government with Redistributive Goals | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Economics | en_US |
dc.subject.hlbtoplevel | Social Sciences | en_US |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/100989/1/ECON430.pdf | |
dc.owningcollname | Economics, Department of - Working Papers Series |
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Economics, Department of - Working Papers Series
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