Why is the Shape of the Laffer Curve for Consumption Tax Different from that for Labor Income Tax?
نویسندگان
چکیده
Recent studies on Laffer curves (tax revenue curves) find that the curve for consumption tax might not be hump-shaped, but monotonically increasing, whereas labor income is hump-shaped. This study investigates cause of this difference in shapes two curves, by decomposing effects an increase a rate base as product parts: (i) relative price leisure (RPL), and (ii) substitution effects. It shown first effect with respect to completely different from rate, while second common among taxes depends functional form utility. The elasticity RPL increasing at most 1, it can infinity increases case tax.
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ژورنال
عنوان ژورنال: Finanzarchiv
سال: 2022
ISSN: ['0015-2218', '1614-0974']
DOI: https://doi.org/10.1628/fa-2022-0009