IDEAS home Printed from https://ideas.repec.org/a/oup/qjecon/v106y1991i3p911-924..html
   My bibliography  Save this article

Should Marginal Tax Rates be Equalized Through Time?

Author

Listed:
  • Geoffrey Kingston

Abstract

I derive necessary and sufficient conditions for the intertemporal equalization of optimal tax rates. The conditions in the case of wage taxes include constant-elasticity labor supply and constant relative risk aversion. Wage taxes should be low in times of relatively elastic labor supply, or low risk aversion. The conditions in the case of capital taxes include perfect-foresight expectations and constant relative risk aversion. If foresight is imperfect, intertemporal equality will be impeded by a covariance term; if relative risk aversion is time-varying, next period's capital tax should have the same sign as this period's change in relative risk aversion.

Suggested Citation

  • Geoffrey Kingston, 1991. "Should Marginal Tax Rates be Equalized Through Time?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(3), pages 911-924.
  • Handle: RePEc:oup:qjecon:v:106:y:1991:i:3:p:911-924.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/2937933
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mr. Evan C Tanner & Mr. Kevin J Carey, 2005. "The Perils of Tax Smoothing: Sustainable Fiscal Policy with Random Shocks to Permanent Output," IMF Working Papers 2005/207, International Monetary Fund.
    2. Fisher, Lance A. & Kingston, Geoffrey H., 2004. "Theory of tax smoothing in the small open economy," Economics Letters, Elsevier, vol. 85(1), pages 1-7, October.
    3. Alex Armstrong & Nick Draper & André Nibbelink & Ed Westerhout, 2007. "Fiscal prefunding in response to demographic uncertainty," CPB Discussion Paper 85.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Nick Draper & Alex Armstrong, 2007. "GAMMA; a simulation model for ageing, pensions and public finances," CPB Document 147, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Alex Armstrong & Nick Draper & André Nibbelink & Ed Westerhout, 2007. "Fiscal prefunding in response to demographic uncertainty," CPB Discussion Paper 85, CPB Netherlands Bureau for Economic Policy Analysis.
    6. A. Fatas & Mr. Atish R. Ghosh & Ugo Panizza & Mr. Andrea F Presbitero, 2019. "The Motives to Borrow," IMF Working Papers 2019/101, International Monetary Fund.
    7. Samuel Bonzu, 2022. "Fiscal Policy and Optimal Taxation in Sierra Leone: Testing for Tax Smoothing Hypothesis," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(2), pages 1-61, February.
    8. Mr. Evan C Tanner, 2013. "Fiscal Sustainability: A 21st Century Guide for the Perplexed," IMF Working Papers 2013/089, International Monetary Fund.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:qjecon:v:106:y:1991:i:3:p:911-924.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/qje .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.