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Bling Bling Taxation and the Fiscal Virtues of Hip Hop

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  • Engström, Per

    ()
    (Uppsala Center for Fiscal Studies)

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    Abstract

    The paper extends Ng’s (1987) model of optimal taxation of diamond goods — goods that are valued solely for their costliness. We extend his findings by analyzing how other goods should be taxed in the presence of pure diamond goods; modified Ramsey rules are derived in a basic single-type model as well as in a two-type model with redistribution. One key finding, that may be surprising and rather provoking, is that close complements (hip hop music) to diamond goods (bling bling) should be heavily subsidized.

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    File URL: http://ucfs.nek.uu.se/digitalAssets/129/129570_wp20107.pdf
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    Bibliographic Info

    Paper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Fiscal Studies with number 2010:7.

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    Length: 12 pages
    Date of creation: 17 Aug 2010
    Date of revision:
    Handle: RePEc:hhs:uufswp:2010_007

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    Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
    Phone: + 46 18 471 25 00
    Fax: + 46 18 471 14 78
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    Web page: http://www.nek.uu.se/
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    Keywords: optimal taxation; status; luxury taxation;

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