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The theory of optimal taxation: what is the policy relevance?

  • Peter Sørensen

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    The paper discusses the implications of optimal tax theory for the debates on uniform commodity taxation and neutral capital income taxation. While strong administrative and political economy arguments in favor of uniform and neutral taxation remain, recent advances in optimal tax theory suggest that the information needed to implement the differentiated taxation prescribed by optimal tax theory may be easier to obtain than previously believed. The paper also points to the strong similarity between optimal commodity tax rules and the rules for optimal source-based capital income taxation. Copyright Springer Science+Business Media, LLC 2007

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    File URL: http://hdl.handle.net/10.1007/s10797-007-9024-1
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    Article provided by Springer in its journal International Tax and Public Finance.

    Volume (Year): 14 (2007)
    Issue (Month): 4 (August)
    Pages: 383-406

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    Handle: RePEc:kap:itaxpf:v:14:y:2007:i:4:p:383-406
    Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102915

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    1. John Piggott & John Whalley, 2001. "VAT Base Broadening, Self Supply, and the Informal Sector," American Economic Review, American Economic Association, vol. 91(4), pages 1084-1094, September.
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    12. Osmundsen, P. & Hagen, K. P. & Schjelderup, G., 1998. "Internationally mobile firms and tax policy1," Journal of International Economics, Elsevier, vol. 45(1), pages 97-113, June.
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    15. Emmanuel Saez, 2002. "Direct or Indirect Tax Instruments for Redistribution: Short-run versus Long-run," NBER Working Papers 8833, National Bureau of Economic Research, Inc.
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