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Tax Smoothing versus Tax Shifting
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
2002 (English)Report (Other academic)
Abstract [en]

Household-specific growth rates of the tax base imply that the timing of tax collections determines the distribution of tax burdens and wealth across households. Changes in financial policy do not only shift taxes across generations, but also within cohorts. Insitutional deficit constraints settle tax shifting conflicts in favor of individuals with high income growth. With distortionary taxes, policy makers trade off the wealth effects of financial policy and the efficiency cost of household-specific deadweight burdens. I apply the incidence analysis of financial policy to two examples: The financing of the German unifications, and the timing of tax collections over the U.S. business cycle.

Place, publisher, year, edition, pages
Stockholm: IIES , 2002. , 32 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University. (Online), ISSN 1653-610X ; 711
Keyword [en]
optimal financial policy, government debt, income distribution, time consistency
National Category
URN: urn:nbn:se:su:diva-42027OAI: diva2:343729
Available from: 2010-08-16 Created: 2010-08-16 Last updated: 2010-08-16Bibliographically approved

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