Tax Deductibility of Commuting Expenses and Residential Land Use with more than one Center
AbstractThis paper analyzes the treatment of commuting expenses by the income tax code from a normative and a positive point of view within a continuous space framework with endogenous residence choices and perfect labor mobility. As commuting expenses should never be deductible from the income tax base in a first-best world, deductibility might well be the outcome of a second-best-optimum-tax approach provided that not all factors of production were mobile. Non-deductibility might be justified by a lack of instruments to internalize environmental and congestion externalities or by perfect mobility of all production factors. However, the existence of deductions in many coun-tries can be easily explained within a public choice framework by redistribution from non-commuters to commuters.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 972.
Date of creation: 2003
Date of revision:
Income tax; relief; residential land use; labor mobility; commuting expenses; optimum taxation;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
This paper has been announced in the following NEP Reports:
- NEP-ACC-2004-06-02 (Accounting & Auditing)
- NEP-ALL-2004-06-02 (All new papers)
- NEP-GEO-2004-06-02 (Economic Geography)
- NEP-PBE-2004-05-09 (Public Economics)
- NEP-URE-2004-05-09 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Rainald Borck & Matthias Wrede, 2004. "Political Economy of Commuting Subsidies," CESifo Working Paper Series 1339, CESifo Group Munich.
- Wolfram F. Richter & Peter Bareis & Matthias Wrede & Martin Gasche, 2004. "Ist die Abschaffung der Entfernungspauschale ökonomisch sinnvoll?," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 57(05), pages 5-19, 03.
- Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.
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