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since Corlett and Hague (1953), it has been understood that it tends to
be optimal on second-best grounds to (relatively) tax complements to
leisure and subsidize substitutes because doing so helps to offset the
distorting effect of taxation on labor supply. Yet in the context of
simultaneous optimization of a nonlinear income tax and commodity
taxes, Atkinson and Stiglitz (1976) claim to have demonstrated the
opposite, that goods complementary with leisure should "face lower tax
rates, whereas substitutes face higher tax rates." Derivations in
leading texts on optimal taxation seem to yield opposing conclusions
regarding the sign of optimal deviation of commodity taxes from
uniformity. It is demonstrated that the optimality of relatively taxing
leisure complements is indeed correct, and conflicting results are
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Kaplow & Shavell on On the Superiority of Corrective Taxes to Quantity Regulation
Oxford University Press has posted On the Superiority of Corrective Taxes to Quantity Regulation, 4 Am. L. & Econ. Rev. 1 (2002), by Louis Kaplow (Harvard) & Steven M. Shavell (Harvard), on SSRN ($38 per download)...
Kaplow Presents Optimal Policy with Heterogeneous Preferences Today at Columbia
Louis Kaplow (Harvard) presents Optimal Policy with Heterogeneous Preferences at Columbia today as part of its Tax Policy Colloquium Series. Here is the abstract: Optimal policy rules - including those regarding income taxation, commodity taxation, public goods, and externalities -...
The Miserable Human Condition
This article points out that the rich have less leisure time than the poor: Being rich used to get you into the leisure class. Money meant freedom ? from work, money worries, household chores and screaming kids (via boarding school)...
BBC Taxing Questions Series
Check out this BBC series on Taxing Questions as part of its Changing World series. Taxing Questions explores how globalization and cultural attitudes impact taxation around the world: Part One: Taxes may be a fact of life for us...
Diamond Reviews Taxing Capital Income
John W. Diamond (Baker Institute for Public Policy, Rice University) has published Book Review: Taxing Capital Income, 61 Nat'l Tax J. 337 (June 2008) (reviewing Taxing Capital Income (The Urban Institute Press, 2006) (C...
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Joel Slemrod (University of Michigan) & Jon Bakija (Williams College) have published Taxing Ourselves: A Citizen's Guide to the Debate over Taxes (MIT Press, 4th ed. 2008). Here is the publisher's description: As Albert Einstein may or may not have...