A note on optimal taxation, status consumption, and unemployment

• 成果类型: Article
• 署名作者: Aronsson, Thomas; Johansson-Stenman, Olof
• 署名单位: Umea University; University of Gothenburg
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2021.104458
• 发表日期: 2021
• 关键词: Optimal taxation; relative consumption; externalities; unemployment

摘要

Existing research on optimal taxation in economies with status-driven relative consumption (implicitly) assumes that there is no involuntary unemployment, despite ample evidence that real world labor markets are typically characterized by such unemployment. We show how the marginal tax policy ought to be modified to simultaneously account for positional consumption externalities and equilibrium unemployment, and find that interaction effects between these two market failures are crucial determinants of the marginal tax structure. In certain cases, the policy incentive to tax away positional externalities vanishes completely, and negative positional externalities may even lead to lower marginal taxation, under involuntary unemployment. (c) 2021 Elsevier B.V. All rights reserved.