Labour Income Uncertainty, Taxation and Public Good Provision

Bibliographic Data

ID9710340
AuthorsJukka Pirttilä (0000-0002-5462-8368, Labour Institute for Economic Research, Helsinki), Matti Tuomala (0000-0003-1107-0648, University of Tampere)
Year2007
Volume117
Issue518
Pages567-582
Publication date2007-03-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2007.02030.x
OpenAlexW1974761154
LanguageEN
Citations received2
References cited28

This article examines optimal nonlinear income taxation, commodity taxation and public good provision under income uncertainty in a moral hazard framework. Uniform commodity taxation and the Samuelson rule for public good provision are desirable under similar conditions as in the conventional tax model. Deviations from these rules is warranted if one can encourage effort by subsidising certain goods and overproviding public goods. We also determine a rule for the optimal marginal income tax rate and provide some numerical simulations. Conditions for the validity of the solution procedure used in this class of models, the first-order approach, are also explored. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007

Class (philosophy · Commodity · Economics · Incentive · Income tax · International taxation · Market economy · Microeconomics · Moral hazard · Order (exchange · Public economics · Public good · Tax reform · Climate Change Policy and Economics · Finance · Fiscal Policy and Economic Growth · Gender, Labor, and Family Dynamics

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