search query: @indexterm taxation / total: 1872
reference: 468 / 1872
| Author: | Gaube, T. |
| Title: | When do distortionary taxes reduce the optimal supply of public goods? |
| Journal: | Journal of Public Economics
2000 : MAY, VOL. 76:2, p. 151-180 |
| Index terms: | Public goods Taxation Models Economic theory |
| Freeterms: | Government spending |
| Language: | eng |
| Abstract: | It is often argued that the optimal level of public good provision is below the first best level as long as the government's expenditures have to be financed by distortionary taxes. This hypothesis and show that it is correct in representative consumer economy if: 1. the public good is normal, and 2. private commodities are normal and gross substitutes. Otherwise, counter-examples can be constructed. These results hold also with heterogeneous households provided that equity considerations are ignored. In general, however, distributional objectives may lead to higher level of public expenditures in second best than in first best. |
SCIMA