On the taxation of durable goods and housing
2015 (English)Report (Other academic)
This paper proposes a theory of commodity taxation in the presence of durable goods. Optimal commodity taxes depend on preference nonseparabilities between durable and nondurable consumption. In particular, the seminal Atkinson-Stigliz result fails and differential commodity taxes are optimal even when the utility function is separable between labor and consumption. An application to housing decisions implies that housing should face higher tax rates than nondurable consumption. Moreover, the theory justifies housing provisions in the income tax code.
Place, publisher, year, edition, pages
Munich: CESifo Group , 2015.
, CESifo Working Paper Series, 5194
optimal taxation, commodity taxation, durable goods, Atkinson-Stiglitz result, pre-committed goods, housing
IdentifiersURN: urn:nbn:se:su:diva-127441OAI: oai:DiVA.org:su-127441DiVA: diva2:909187