nep-pub New Economics Papers
on Public Finance
Issue of 2013‒11‒22
four papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Product diversity, demand structures and optimal taxation. By Lewis, Vivien; Roland, Winkler
  2. Factor income taxation, growth, and investment specific technological change By Monisankar Bishnu; Chetan Ghate; Pawan Gopalakrishnan
  3. Recent Reforms of Tax Systems in the EU: Good and Bad News By Gaëlle Garnier; Aleksandra Gburzynska; Endre György; Milena Mathé; Doris Prammer; Savino Ruà; Agnieszka Skonieczna
  4. Are your taxes set in Warsaw? Spatial tax competition in Europe. By Crabbé, Karen

  1. By: Lewis, Vivien; Roland, Winkler
    Abstract: This paper studies optimal taxation in a general equilibrium model with endogenous entry. We compare the constant elasticity of substitution (CES) model to three alternative demand structures: oligopolistic competition in prices, oligopolistic competition in quantities, and translog preferences. Our economy is characterized by two distortions: a labor distortion due to the misalignment of markups on goods and leisure, and an entry distortion due to the misalignment of the consumer surplus effect and the profit destruction effect of entry. The two distortions interact in determining the wedge between the market-driven and optimal level of product diversity. We show how optimal labor and entry taxes depend upon the prevailing demand structure, the nature and size of entry costs, and the degree of substitutability between goods.
    Date: 2013–11
  2. By: Monisankar Bishnu (Indian Statistical Institute, New Delhi); Chetan Ghate (Indian Statistical Institute, New Delhi); Pawan Gopalakrishnan (Indian Statistical Institute, New Delhi)
    Abstract: We construct a tractable endogenous growth model with production externalities in which the public capital stock augments investment speci?c technological change. We characterize the ?rst best ?scal policy and show that there exist several labor and capital tax-subsidy combinations that decentralize the planner?s growth rate. The optimal factor income tax mix is therefore indeterminate which gives the planner the flexibility to choose policy rules from a large set. Our model explains why many advanced economies experiencing similar growth rates have widely varying factor income tax rates.
    Keywords: Investment Specific Technological Change, Endogenous Growth, Factor Income Taxation, Welfare, First best fiscal policy, Indeterminacy
    JEL: E2 E6 H2 O4
    Date: 2013–01
  3. By: Gaëlle Garnier (European Commission); Aleksandra Gburzynska (European Commission); Endre György (European Commission); Milena Mathé (European Commission); Doris Prammer (European Commission); Savino Ruà (European Commission); Agnieszka Skonieczna (European Commission)
    Abstract: This paper reviews to what extent Member States followed the tax policy priorities put forward by the European Commission in the Annual Growth Survey of November 2012: shifting taxation away from labour, broadening tax bases, reducing corporate tax debt bias and improving tax compliance. The ‘good news’ which emerges from the analysis is that overall Member States are making efforts to make tax systems more efficient, competitive and fair; the ‘bad news’ is that the extent of the challenges calls for more action in all the priority areas identified.
    Keywords: European Union, taxation, tax policy, tax reform, VAT, tax fraud, corporate taxation, personal income taxation, environment, research and development
    JEL: H11 H20 H24 H25 H26 H27 H87
    Date: 2013–10
  4. By: Crabbé, Karen
    Date: 2013

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