Tax structure and government expenditures with tax equity concerns

Publikation: Beitrag in FachzeitschriftArtikelForschungPeer-Review

Autoren

  • Tobias Koenig
  • Andreas Wagener

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OriginalspracheEnglisch
Seiten (von - bis)137-153
Seitenumfang17
FachzeitschriftJournal of Economic Behavior and Organization
Jahrgang90
Frühes Online-Datum8 Mai 2012
PublikationsstatusVeröffentlicht - Juni 2013

Abstract

We augment a standard tax model by concerns about tax equity: people get upset when labour is taxed more heavily than capital. Even the slightest concern for tax equity invalidates the common tenet that capital remains tax-exempt in small open economies. This holds for exogenous as well as for endogenous government expenditures and irrespective of whether concerns with tax equity only cause emotional discomfort or also impact on work incentives. If concerns with tax equity get more intense, the economy may choose higher taxes on labour and move to the downward sloped part of its Laffer curve. For endogenous government spending, stronger concerns with tax equity may lead to a larger size of the public sector.

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Tax structure and government expenditures with tax equity concerns. / Koenig, Tobias; Wagener, Andreas.
in: Journal of Economic Behavior and Organization, Jahrgang 90, 06.2013, S. 137-153.

Publikation: Beitrag in FachzeitschriftArtikelForschungPeer-Review

Koenig T, Wagener A. Tax structure and government expenditures with tax equity concerns. Journal of Economic Behavior and Organization. 2013 Jun;90:137-153. Epub 2012 Mai 8. doi: 10.1016/j.jebo.2012.04.019
Koenig, Tobias ; Wagener, Andreas. / Tax structure and government expenditures with tax equity concerns. in: Journal of Economic Behavior and Organization. 2013 ; Jahrgang 90. S. 137-153.
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