Time-consistent consumption taxation

• 成果类型: Article
• 署名作者: Laczo, Sarolta; Rossi, Raffaele
• 署名单位: University of London; Queen Mary University London; Centre for Economic Policy Research - UK; University of Manchester
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.03.005
• 发表日期: 2020
• 页码: 194-220
• 关键词: Fiscal policy; Markov-perfect policies; consumption taxation; Variable capital utilisation

摘要

We characterise optimal tax policies when the government has access to consumption taxation and cannot credibly commit to future policies. We consider a neoclassical economy where factor income taxation is distortionary within the period, due to endogenous labour and capital utilisation and non-tax-deductibility of depreciation. Contrary to the case where only labour and capital income are taxed, the optimal time-consistent policies with consumption taxation are remarkably similar to their Ramsey counterparts. The welfare gains from commitment are negligible, while they are substantial without consumption taxation. Further, the welfare gains from taxing consumption are much higher without commitment. (c) 2019 Elsevier B.V. All rights reserved.