Optimal Taxation with Imperfect Competition and Aggregate Returns to Specialization
| Autor: | Fernando Sánchez Losada, Javier Coto-Martinez, Carlos Garriga |
|---|---|
| Rok vydání: | 2007 |
| Předmět: |
Government
ComputingMilieux_LEGALASPECTSOFCOMPUTING Monetary economics Taxation Fiscal policy ComputingMilieux_GENERAL Microeconomics Monopolistic competition Specialization (functional) Economics Market power Imperfect Optimal tax Fixed cost Productivity General Economics Econometrics and Finance Total factor productivity Imperfect competition |
| Zdroj: | Journal of the European Economic Association. 5:1269-1299 |
| ISSN: | 1542-4774 1542-4766 |
| Popis: | In this paper we explore the proposition that in economies with imperfect competitive markets the optimal capital income tax is negative and the optimal tax on firms profits is confiscatory. We show that if the total factor productivity as well as the measure of firms or varieties are endogenous instead of fixed, then the optimal fiscal policy can lead to different results. The government faces a trade-off between the fixed costs that society pays for the introduction of a new firm and the productivity gains associated to the introduction of a new variety. We find that the optimal fiscal policy depends on the relationship between the index of market power, the returns to specialization, and the government's ability to control entry. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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