Resource title

Commodity taxation and social welfare: the generalised Ramsey rule

Resource image

image for OpenScout resource :: Commodity taxation and social welfare: the generalised Ramsey rule

Resource description

Commodity taxes have three distinct roles: (1) revenue collection, (2) interpersonal redistribution, and (3) resource allocation. The paper presents an integrated treatment of these three concerns in a second-best general equilibrium framework, which leads to the 'generalised Ramsey rule' for optimum taxation. We show how many standard results on optimum taxation and tax reform have a straightforward counterpart in this general framework. Using this framework, we also try to clarify the notion of 'deadweight loss' as well as the relation between alternative distributional assumptions and the structure of optimum taxes.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://eprints.lse.ac.uk/6651/1/Commodity_Taxation_and_Social_Welfare_The_Generalised_Ramsey_Rule.pdf

Resource license