Tax Smoothing versus Tax Shifting

Review of Economic Dynamics, 2004, vol. 7, issue 1, 27-51

Abstract: Household-specific growth rates of the tax base imply that the timing of tax collections determines the distribution of tax burdens and wealth across households. Changes in fiscal policy do not only shift tax burdens across generations, but also within cohorts. Institutional deficit constraints settle tax shifting conflicts in favor of individuals with high income growth. With distortionary taxes, policy makers trade off the relative welath effects of fiscal policy and the efficiency cost of household-specific deadweight burdens. I apply the incidence analysis of fiscal policy to answer the question how the German unification should have optimally been financed. (Copyright: Elsevier)

Keywords: optimal fiscal policy; government debt; wealth distribution; German unification; time consistency. (search for similar items in EconPapers)
JEL-codes: E61 E62 E63 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://dx.doi.org/10.1016/S1094-2025(03)00048-6 Full text (application/pdf)
Access to full texts is restricted to ScienceDirect subscribers and ScienceDirect institutional members. See http://www.sciencedirect.com/ for details.

Related works:
Working Paper: Tax Smoothing versus Tax Shifting (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:issued:v:7:y:2004:i:1:p:27-51

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1016/S1094-2025(03)00048-6

Access Statistics for this article

Review of Economic Dynamics is currently edited by Loukas Karabarbounis

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().