Taxation of consumption and labor income a quantitative approach Francesca Parodi
By: Parodi, Francesca
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Material type: 
ArticleSubject(s): COMERCIO | IMPUESTOS | RENDIMIENTOS DE TRABAJO | AHORRO | RENTA FAMILIAR | POLITICA FISCAL | PRESTACIONES SOCIALES | MODELOS ECONOMETRICOS
In:
American Economic Journal : Macroeconomics v. 15, n. 4, October 2023, p. 177-216Summary: I quantitatively characterize optimal consumption and labor income taxes in a structural life-cycle model of household consumption, saving, and employment choices that allows for irreversibility of durable goods and preference heterogeneity. I find that durables should be subsidized and nondurables should be taxed at a uniform rate. The durable subsidy is driven by the life-cycle features of the model together with durables' irreversibility and borrowing constraints. Uniform taxation on nondurables holds under exogenous and endogenous—fully or weakly separable—labor supply and it relies on homogeneity of intertemporal preferences. Allowing for government's equity concerns, I show that the model rationalizes the tax practice.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 2137/2023/4-3 (Browse shelf) | Available | OP 2137/2023/4-3 |
Resumen.
Bibliografía.
I quantitatively characterize optimal consumption and labor income taxes in a structural life-cycle model of household consumption, saving, and employment choices that allows for irreversibility of durable goods and preference heterogeneity. I find that durables should be subsidized and nondurables should be taxed at a uniform rate. The durable subsidy is driven by the life-cycle features of the model together with durables' irreversibility and borrowing constraints. Uniform taxation on nondurables holds under exogenous and endogenous—fully or weakly separable—labor supply and it relies on homogeneity of intertemporal preferences. Allowing for government's equity concerns, I show that the model rationalizes the tax practice.
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