A case for taxing education

Tomer Blumkin, Efraim Sadka

Research output: Contribution to journalArticlepeer-review

Abstract

In this paper we establish, contrary to conventional wisdom, a case for taxing education, as a supplement to the labor income tax, by drawing on some informational feature of education, which the government may utilize. Discretionary decisions of individuals to acquire education may serve as an additional signal (to earned labor income) on the underlying unobserved innate earning ability, thereby mitigating the informational constraint faced by the government.

Original languageEnglish
Pages (from-to)145-163
Number of pages19
JournalInternational Tax and Public Finance
Volume15
Issue number2
DOIs
StatePublished - Apr 2008

Keywords

  • Education
  • Inequality
  • Optimal taxation
  • Re-distribution

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