Dynamic Tax Incidence and Intergenerationally Neutral Reform
Journal
European Economic Review
ISSN
0014-2921
Type
journal article
Date Issued
1994-02-01
Author(s)
Abstract
The paper proposes a basic definition of intergenerational neutrality in the overlapping generations model when agents have a pure life cycle motive of savings. The derivation of intergenerationally neutral tax effects provides a redistribution free benchmark case that isolates the relative price effects of taxes and the deadweight losses associated with them. The paper clarifies the intergenerational incidence which has to be determined simultaneously with the substitution effects of taxes on savings. A tax reform example demonstrates how taxes with diverging intergenerational incidence may be combined to achieve intergenerational neutrality. Finally, the paper extends the analysis of generational tax incidence to the case of a small open economy.
Language
English
Keywords
Intergenerational tax neutrality
tax reform
overlapping generations
economic theory
economic policy
dynamic taxation
redistribution.
HSG Classification
not classified
Refereed
No
Publisher
Elsevier
Publisher place
North-Holland
Volume
38
Number
2
Start page
343
End page
366
Pages
24
Subject(s)
Eprints ID
21981