Restoring Ramsey tax lessons to Mirrleesian tax settings: Atkinson-Stiglitz and Ramsey reconciled

Cremer, Helmuth and Gahvari, Firouz (2017) Restoring Ramsey tax lessons to Mirrleesian tax settings: Atkinson-Stiglitz and Ramsey reconciled. Social Choice and Welfare, 49. pp. 11-35.

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Official URL: http://tse-fr.eu/pub/32362

Abstract

This paper restores many of the Ramsey tax/pricing lessons perceived as outdated in the optimal tax literature following the Atkinson and Stiglitz (J Public Econ 6:55–75, 1976) framework wherein differential commodity taxes are considered to be redundant. The key to our findings is the incorporation of a “break-even constraint” for public firms into the Atkinson and Stiglitz framework. Break-even constraints are fundamental to the regulatory pricing literature but have somehow been overlooked in the optimal tax literature. Incorporating them reconciles the optimal-tax and the regulatory-pricing views on Ramsey tax/pricing rules.

Item Type: Article
Language: English
Date: June 2017
Refereed: Yes
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 13 Apr 2018 14:34
Last Modified: 13 Apr 2018 14:34
OAI ID: oai:tse-fr.eu:32362
URI: http://publications.ut-capitole.fr/id/eprint/25809

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