Autore:
TRABANDT, Mathias
Titolo:
Optimal Pre-Announced Tax Reform RevisitedPeriodico:
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papersAnno:
2007 - Fascicolo:
52 - Pagina iniziale:
1 - Pagina finale:
59Domeij and Klein (2005) have shown that the welfare gains of an optimal capital and labor income tax reform decline the longer the reform is pre-announced before its implementation. In other words, pre-announcement is costly in terms of welfare. I reexamine their claim by taking two additional features of government spending into account: public goods and public capital. In my baseline optimal reform, I show that valuable and productive government spending is likely to reduce the welfare costs of pre-announcement. Further, the baseline optimal pre-announced reform displays short-run confiscation and/or subsidy of capital and labor income. As a further contribution, I show that these short-run properties are not important for the welfare gains of pre-announced reforms with sufficiently long pre-announcement duration. In particular, a 4 years pre-announced suboptimal reform in which taxes move - without confiscation and subsidy - directly to their endogenous long-run values at the implementation date generates similar welfare gains as the 4 years preannounced baseline optimal reform. The underlying tax structure of both reforms, however, appears to be very different.
Premi sulle icone
![](http://www.bncf.firenze.sbn.it/img/logo-bncf.jpg)
a fianco dei nomi per visualizzare i libri scritti dall'autore
X
Opere monografiche dal catalogo BNCF
Esportazione dati in Refworks (solo per utenti abilitati)
Record salvabile in Zotero