Commodity Taxes under Partial Separability Cannot Be Undistorted

Nishimura, Yukihiro

Discussion Papers In Economics And Business, 2025, 25-09, 1-13

Number of Access:19（2025-10-10 20:18 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/102581

Item Information

Output File Export EndNote Basic Export Mendeley

Title
Commodity Taxes under Partial Separability Cannot Be Undistorted
Creator
NRID
1000090345471 1000090345471
researchmap permalink
read0156474 read0156474
Scopus Author ID
7403347968 7403347968
CreatorName
Nishimura, Yukihiro
Subject
Uniform commodity taxes
Tax reform
Income tax
JEL
H21
H24
Abstract
The nature of optimal commodity taxes and tax reform are not well understood in the literature under the separability of subset of consumption goods. We show in this paper that, contrary to the claims of previous researches, under the combination of non-linear income tax and linear commodity taxes, a tax reform towards uniform taxes of the subset of commodities may not be welfare-improving.Furthermore, a distortion of production that alters the relative wages has additional benefit through mimickers’ consumption choices. We also newly characterize the optimal commodity taxes in this setting to show that, to quench possible heterogeneous impacts to the cross-substitution effects on the other commodities, optimally uniform tax towards the separated goods requires uniform income effects across income classes, so that the constraint on the Engel curves in the corresponding optimally linear income and commodity taxes cannot be fully omitted.
Publisher
Graduate School of Economics, The University of Osaka
Source Title
Discussion Papers In Economics And Business
Volume (Issue)
25-09
Page
1-13
Date of Issued
2025-08
Language
English
Handle URL
https://hdl.handle.net/11094/102581
Relation.references
URI
https://www2.econ.osaka-u.ac.jp/econ_society/dp/2509.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
Discussion Papers In Economics And Business