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Title: Optimal taxation in a growth model with public consumption and home production
Authors: Zhang, J. 
Davies, J.
Zeng, J. 
McDonald, S.
Keywords: Home production
Optimal taxation
Public consumption
Issue Date: Apr-2008
Citation: Zhang, J., Davies, J., Zeng, J., McDonald, S. (2008-04). Optimal taxation in a growth model with public consumption and home production. Journal of Public Economics 92 (3-4) : 885-896. ScholarBank@NUS Repository.
Abstract: In a neoclassical growth model with public consumption, we show the following Pareto optimal tax rules. The government should tax leisure and private consumption at the same rate, and subsidize net investment at the same rate it taxes net capital income. Also, it should tax capital income more heavily than labor income. In an extension for home production, the additional rule is to tax investment for home production at the same rate of the tax on private market consumption. These tax and subsidy rates should be constant over time except the initial tax rate on capital income. © 2007 Elsevier B.V. All rights reserved.
Source Title: Journal of Public Economics
ISSN: 00472727
DOI: 10.1016/j.jpubeco.2007.09.008
Appears in Collections:Staff Publications

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