Title: Status preferences and optimal corrective taxes : a note
Authors: Beckmann, Klaus Bertram 
Gattke, Susan 
Affiliation: Volkswirtschaftslehre, insbesondere Public Economics
n/a
metadata.dc.language.iso: en
metadata.dc.subject.ddc: Wirtschaft
metadata.dc.subject.other: Sozialstatus
Präferenzfunktion
Wahlhandlungstheorie
Einkommensteuer
Issue Date: 2008
Document Type: Working Paper
Journal / Series / Working Paper (HSU): Diskussionspapier / Helmut-Schmidt-Universität / Fächergruppe Volkswirtschaftslehre 
Publisher: Helmut-Schmidt-Universität / Universität der Bundeswehr Hamburg
Publisher Place: Hamburg
metadata.dc.type.version: publishedVersion
Abstract: 
We take issue with the argument expounded, among others, by Layard (2006, Economic Journal) that status-seeking preferences justify heavier taxation of income because this serves to internalise the negative externality that the pursuit of status imposes on others. In a model where status depends on both income and effort, we show that the optimal corrective tax rate is smaller than if non-monetary status plays no role, and that a subsidy of work effort at the margin may be called for. Additionally, we demonstrate how the elasticity of labour supply depends on the parameters of the status production function in such a model, and discuss potential implications for optimal income taxation.
Organization Units (connected with the publication): Fakultät für Wirtschafts- und Sozialwissenschaften 
DOI: http://hdl.handle.net/10419/38733
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