This paper examines methods used to evaluate welfare effects of tax changes, with emphasis on the measurement problems involved. Welfare changes and excess burdens are defined, along with approximations. Aggregate measures, using a social welfare function, are examined. A special case of income taxation is then examined, leading to discussion of the marginal welfare cost of taxation and the marginal cost of funds.
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Length: 72 pages Date of creation: 1997 Date of revision: Handle: RePEc:mlb:wpaper:587
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Find related papers by JEL classification: D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
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