Tax Policy with Uncertain Future Costs: Some Simple Models
AbstractThis paper considers the extent to which the standard argument, that the disproportionate excess burden of taxation suggests the use of tax-smoothing in the face of future cost increases, is modified by uncertainty regarding the future. The role of uncertainty and risk aversion are examined using several highly simplified models involving a possible future contingency requiring an increase in tax-financed expenditure.
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Bibliographic InfoPaper provided by Victoria University of Wellington, Chair in Public Finance in its series Working Paper Series with number 2839.
Date of creation: 2013
Date of revision:
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Phone: +64 (4) 463 5775
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Tax smoothing; Uncertainty; Risk; Excess burden;
Other versions of this item:
- Christopher Ball & John Creedy, 2013. "Tax Policy with Uncertain Future Costs: Some Simple Models," Treasury Working Paper Series 13/07, New Zealand Treasury.
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D90 - Microeconomics - - Intertemporal Choice - - - General
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