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Redistribution and the marginal Cost of Public Funds

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  • Sandmo, A.
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    Abstract

    Discussion of the marginal cost of public funds with distortionary taxation are often cast in the framework of a one-consumer economy, while the main justification of distortionay taxes is that they are needed for distribution. This paper analyzes the issue in a model with heterogeneous consumers and a linear income tax, focusing on the tradeoff between labour market distortions and the redistribution from high-wage to low-wage workers.

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    Bibliographic Info

    Paper provided by Norwegian School of Economics and Business Administration- in its series Papers with number 8/97.

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    Length: 19 pages
    Date of creation: 1997
    Date of revision:
    Handle: RePEc:fth:norgee:8/97

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    Postal: NORWEGIAN SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION, HELLEVEIEN 30, 5035 BERGEN SANDVIKEN NORWAY.
    Phone: 5595 9000
    Fax: 5595 9100
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    Web page: http://www.nhh.no/
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    Keywords: FISCAL POLICY ; PUBLIC GOODS;

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    Cited by:
    1. Lars Hokonsen, 1998. "An Investigation into Alternative Representations of the Marginal Cost of Public Funds," International Tax and Public Finance, Springer, vol. 5(3), pages 329-343, July.

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