Budget share and optimal commodity taxes without computation

Yves Balcer; Efraim Sadka

doi:10.1016/0165-1765(81)90062-8

Budget share and optimal commodity taxes without computation

Yves Balcer^*, Efraim Sadka

^*Corresponding author for this work

School of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This paper shows for the linear expenditure system that the optimal tax rates increase across commodities in the ratio of the respective budget shares of the rich to those of the poor-i.e., the more luxurious good has a higher tax. These budget shares can be calculated either at pre-tax or post-tax price levels, thus can be expressed directly in terms of the basic parameters of the linear expenditure system.

Original language	English
Pages (from-to)	265-271
Number of pages	7
Journal	Economics Letters
Volume	7
Issue number	3
DOIs	https://doi.org/10.1016/0165-1765(81)90062-8
State	Published - 1981

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title = "Budget share and optimal commodity taxes without computation",

abstract = "This paper shows for the linear expenditure system that the optimal tax rates increase across commodities in the ratio of the respective budget shares of the rich to those of the poor-i.e., the more luxurious good has a higher tax. These budget shares can be calculated either at pre-tax or post-tax price levels, thus can be expressed directly in terms of the basic parameters of the linear expenditure system.",

author = "Yves Balcer and Efraim Sadka",

note = "Funding Information: * This research reported here was supported by National Science Foundation Grant DAR-7917376 and by funds granted to the Institute for Research on Poverty at the University of Wisconsin-Madison by the Department of Health and Human Services (formerly HEW) pursuant to the provisions of the Economic Opportunity Act of 1964. The opinions expressed are those of the authors.",

year = "1981",

doi = "10.1016/0165-1765(81)90062-8",

language = "אנגלית",

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AU - Balcer, Yves

AU - Sadka, Efraim

N1 - Funding Information: * This research reported here was supported by National Science Foundation Grant DAR-7917376 and by funds granted to the Institute for Research on Poverty at the University of Wisconsin-Madison by the Department of Health and Human Services (formerly HEW) pursuant to the provisions of the Economic Opportunity Act of 1964. The opinions expressed are those of the authors.

PY - 1981

Y1 - 1981

N2 - This paper shows for the linear expenditure system that the optimal tax rates increase across commodities in the ratio of the respective budget shares of the rich to those of the poor-i.e., the more luxurious good has a higher tax. These budget shares can be calculated either at pre-tax or post-tax price levels, thus can be expressed directly in terms of the basic parameters of the linear expenditure system.

AB - This paper shows for the linear expenditure system that the optimal tax rates increase across commodities in the ratio of the respective budget shares of the rich to those of the poor-i.e., the more luxurious good has a higher tax. These budget shares can be calculated either at pre-tax or post-tax price levels, thus can be expressed directly in terms of the basic parameters of the linear expenditure system.

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DO - 10.1016/0165-1765(81)90062-8

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AN - SCOPUS:49149134260

VL - 7

SP - 265

EP - 271

JO - Economics Letters

JF - Economics Letters

SN - 0165-1765

IS - 3

ER -

Budget share and optimal commodity taxes without computation

Abstract

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