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A note on Deaton's theorem on the undesirability of nonuniform excise taxation

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  • Hellwig, Martin F.

Abstract

The paper provides an extension and a new proof of Deaton's theorem on the undesirability of nonuniform excise taxation when income taxes are affine and preferences over consumption goods are separable from labour-leisure choices, homothetic, and identical across agents.

Suggested Citation

  • Hellwig, Martin F., 2009. "A note on Deaton's theorem on the undesirability of nonuniform excise taxation," Economics Letters, Elsevier, vol. 105(2), pages 186-188, November.
    • Handle: RePEc:eee:ecolet:v:105:y:2009:i:2:p:186-188
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    References listed on IDEAS

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    1. Kaplow, Louis, 2006. "On the undesirability of commodity taxation even when income taxation is not optimal," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1235-1250, August.
    2. Laroque, Guy R., 2005. "Indirect taxation is superfluous under separability and taste homogeneity: a simple proof," Economics Letters, Elsevier, vol. 87(1), pages 141-144, April.
    3. Guesnerie,Roger, 1998. "A Contribution to the Pure Theory of Taxation," Cambridge Books, Cambridge University Press, number 9780521629560, November.
    4. Iván Werning, 2007. "Optimal Fiscal Policy with Redistribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 925-967.
    5. Peter J. Hammond, 1979. "Straightforward Individual Incentive Compatibility in Large Economies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(2), pages 263-282.
    6. Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
    7. Deaton, Angus, 1979. "Optimally uniform commodity taxes," Economics Letters, Elsevier, vol. 2(4), pages 357-361.
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    Citations

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    Cited by:

    1. Boadway, Robin & Song, Zhen, 2016. "Indirect taxes for redistribution: Should necessity goods be favored?," Research in Economics, Elsevier, vol. 70(1), pages 64-88.
    2. Robin Boadway & Katherine Cuff, 2021. "Generalization of the Deaton Theorem: Piecewise Linear Income Taxation and Participation Decisions," CESifo Working Paper Series 9265, CESifo.
    3. Robin Boadway & Katherine Cuff, 2023. "The Case for Uniform Commodity Taxation: A Tax Reform Approach," Hacienda Pública Española / Review of Public Economics, IEF, vol. 244(1), pages 79-109, March.
    4. Traxler, Christian, 2012. "Majority voting and the welfare implications of tax avoidance," Journal of Public Economics, Elsevier, vol. 96(1), pages 1-9.
    5. Robin Boadway, 2017. "Second-Best Theory: Ageing well at Sixty," Pacific Economic Review, Wiley Blackwell, vol. 22(2), pages 249-270, May.
    6. Hellwig, Martin F., 2010. "A generalization of the Atkinson-Stiglitz (1976) theorem on the undesirability of nonuniform excise taxation," Economics Letters, Elsevier, vol. 108(2), pages 156-158, August.
    7. Boadway, Robin & Cuff, Katherine, 2022. "A generalization of the Deaton-Hellwig results on uniform commodity taxation," Journal of Public Economics, Elsevier, vol. 214(C).

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    More about this item

    Keywords

    Optimal excise taxes Atkinson-Stiglitz theorem Deaton's theorem;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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