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A Note on Deaton's Theorem on the Undesirability of Nonuniform Excise Taxation

Author

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  • Martin Hellwig

    () (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

The paper provides an extension and a new proof of Deaton's theorem on the undesirability of nonuniform excise taxation when income taxes are affine and preferences over consumption goods are separable from labour-leisure choices, homothetic, and identical across agents.

Suggested Citation

  • Martin Hellwig, 2008. "A Note on Deaton's Theorem on the Undesirability of Nonuniform Excise Taxation," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2008_45, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2008_45
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    References listed on IDEAS

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    1. Kaplow, Louis, 2006. "On the undesirability of commodity taxation even when income taxation is not optimal," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1235-1250, August.
    2. Iván Werning, 2007. "Optimal Fiscal Policy with Redistribution," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 925-967.
    3. Deaton, Angus, 1979. "Optimally uniform commodity taxes," Economics Letters, Elsevier, vol. 2(4), pages 357-361.
    4. Laroque, Guy R., 2005. "Indirect taxation is superfluous under separability and taste homogeneity: a simple proof," Economics Letters, Elsevier, vol. 87(1), pages 141-144, April.
    5. Peter J. Hammond, 1979. "Straightforward Individual Incentive Compatibility in Large Economies," Review of Economic Studies, Oxford University Press, vol. 46(2), pages 263-282.
    6. Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Boadway, Robin & Song, Zhen, 2016. "Indirect taxes for redistribution: Should necessity goods be favored?," Research in Economics, Elsevier, vol. 70(1), pages 64-88.
    2. repec:bla:pacecr:v:22:y:2017:i:2:p:249-270 is not listed on IDEAS
    3. Christian Traxler, 2009. "Majority Voting and the Welfare Implications of Tax Avoidance," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2009_22, Max Planck Institute for Research on Collective Goods.
    4. Hellwig, Martin F., 2010. "A generalization of the Atkinson-Stiglitz (1976) theorem on the undesirability of nonuniform excise taxation," Economics Letters, Elsevier, vol. 108(2), pages 156-158, August.

    More about this item

    Keywords

    Optimal Excise Taxes; Atkinson-Stiglitz Theorem; Deaton's Theorem;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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