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A Characteristics Approach to Optimal Taxation: Line Drawing and Tax‐Driven Product Innovation
dc.contributor.authorGillitzer, Christian
dc.contributor.authorKleven, Henrik Jacobsen
dc.contributor.authorSlemrod, Joel
dc.date.accessioned2017-04-14T15:10:06Z
dc.date.available2018-05-15T21:02:51Zen
dc.date.issued2017-04
dc.identifier.citationGillitzer, Christian; Kleven, Henrik Jacobsen; Slemrod, Joel (2017). "A Characteristics Approach to Optimal Taxation: Line Drawing and Tax‐Driven Product Innovation." The Scandinavian Journal of Economics 119(2): 240-267.
dc.identifier.issn0347-0520
dc.identifier.issn1467-9442
dc.identifier.urihttps://hdl.handle.net/2027.42/136402
dc.description.abstractReal‐world tax legislation assigns goods to different categories of tax rates on the basis of observable characteristics, allowing the tax system to handle a constantly evolving set of available goods. We recast the theory of optimal taxation in the language of characteristics, and we show how to optimally draw lines that delineate tax‐rate regimes. Such lines are associated with notches in tax liability as a function of characteristics, creating incentives to introduce goods with new combinations of characteristics in order to reduce tax liability. With a restricted set of tax instruments, such notches are in general part of the second‐best optimal tax system.
dc.publisherElsevier
dc.publisherWiley Periodicals, Inc.
dc.subject.otherH21
dc.subject.othertax design
dc.subject.otherNotches
dc.titleA Characteristics Approach to Optimal Taxation: Line Drawing and Tax‐Driven Product Innovation
dc.typeArticleen_US
dc.rights.robotsIndexNoFollow
dc.subject.hlbsecondlevelEconomics
dc.subject.hlbtoplevelSocial Sciences
dc.description.peerreviewedPeer Reviewed
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/136402/1/sjoe12174_am.pdf
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/136402/2/sjoe2174-sup-0001-onlineappendix.pdf
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/136402/3/sjoe12174.pdf
dc.identifier.doi10.1111/sjoe.12174
dc.identifier.sourceThe Scandinavian Journal of Economics
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dc.owningcollnameInterdisciplinary and Peer-Reviewed


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