Should the Good and the Selfish be Taxed Differently?
AbstractThis paper considers an environment where individual actions have externalities, and where there are two types of agents: socially responsible agents (the good) and selfish agents. Selfish agents have payoff functions that do not take into account social welfare. The payoff of a socially responsible agent is a linear combination of (i) social welfare, and (ii) the payoff of a selfish agent. We demonstrate that the corrective tax rates that maximize social welfare do not depend on the degree of social responsibility of socially responsible agents. Hence, the good and the selfish should not be taxed differently.
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Bibliographic InfoPaper provided by Centre interuniversitaire de recherche en économie quantitative, CIREQ in its series Cahiers de recherche with number 07-2010.
Length: 16 pages
Date of creation: 2010
Date of revision:
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Efficiency-inducing taxation; externalities; social responsibility;
Other versions of this item:
- Ngo Van Long & Frank Stähler, 2012. "Should the Good and the Selfish be Taxed Differently?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(3), pages 932-948, 09.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-17 (All new papers)
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