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Indirect Taxation And Redistribution: The Scope Of The Atkinson-stiglitz Theorem

Author

Listed:
  • Robin Boadway
  • Pierre Pestieau

    (Universite de Liege)

Abstract

The Atkinson-Stiglitz Theorem states that if labor is weakly separable from goods in household utility functions, differential commodity taxation should not be not part of an optimal redistributive tax system. This Theorem, which is arguable the most policy-relevant result to come out of the optimal income tax literature, has come under considerable scrutiny in the literature. We consider how robust it is with respect to differences in needs or endowments of goods, more than one type of labor supply, differences in preference for leisure, and restrictions on policy instruments.

Suggested Citation

  • Robin Boadway & Pierre Pestieau, 2002. "Indirect Taxation And Redistribution: The Scope Of The Atkinson-stiglitz Theorem," Working Paper 1005, Economics Department, Queen's University.
  • Handle: RePEc:qed:wpaper:1005
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    References listed on IDEAS

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    1. Cremer, Helmuth & Pestieau, Pierre & Rochet, Jean-Charles, 2001. "Direct versus Indirect Taxation: The Design of the Tax Structure Revisted," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 781-799, August.
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    5. Browning, Martin & Meghir, Costas, 1991. "The Effects of Male and Female Labor Supply on Commodity Demands," Econometrica, Econometric Society, vol. 59(4), pages 925-951, July.
    6. Marc Fleurbaey & François Maniquet, 2006. "Compensation and responsibility," Working Papers halshs-00121367, HAL.
    7. Deaton, Angus, 1979. "Optimally uniform commodity taxes," Economics Letters, Elsevier, vol. 2(4), pages 357-361.
    8. Cremer, Helmuth & Gahvari, Firouz, 1995. "Uncertainty and optimal taxation: In defense of commodity taxes," Journal of Public Economics, Elsevier, vol. 56(2), pages 291-310, February.
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    Cited by:

    1. Pierre Pestieau & Maria Racionero, 2015. "Tagging with leisure needs," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(4), pages 687-706, December.
    2. André Decoster & Jason Loughrey & Cathal O'Donoghue & Dirk Verwerft, 2010. "How regressive are indirect taxes? A microsimulation analysis for five European countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 326-350.
    3. Robin Boadway & Pierre Pestieau, 2006. "Tagging and redistributive taxation," Annals of Economics and Statistics, GENES, issue 83-84, pages 123-147.
    4. Xavier Ruiz del Portal, 2020. "Two reasons for not using commodity taxation in the presence of an optimal income tax," Hacienda Pública Española / Review of Public Economics, IEF, vol. 232(1), pages 9-28, March.
    5. Bas Jacobs & Dirk Schindler, 2009. "On the Desirability of Taxing Capital Income to Reduce Moral Hazard in Social Insurance," CESifo Working Paper Series 2806, CESifo.
    6. Wakolbinger, Florian & Dreer, Elisabeth & Schneider, Friedrich & Neumärker, Bernhard, 2020. "Konsumsteuer finanziertes BGE in Deutschland," FRIBIS Discussion Paper Series 01-2020, University of Freiburg, Freiburg Institute for Basic Income Studies (FRIBIS).
    7. Fuest, Clemens & Thöne, Michael & Glasmacher, Gregor, 2008. "Ertragsabhängige und ertragsunabhängige Steuern [Income-dependent and income-independent taxation]," FiFo Reports - FiFo-Berichte 10, University of Cologne, FiFo Institute for Public Economics.
    8. Robert Fenge & Jakob Weizsäcker, 2010. "Mixing Bismarck and child pension systems: an optimum taxation approach," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 805-823, March.

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    More about this item

    Keywords

    Indirect Taxation; Optimal Taxation;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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