The signaling effect of tax policy

Barigozzi, Francesca ; Villeneuve, Bertrand (2004) The signaling effect of tax policy. Bologna: Dipartimento di Scienze economiche DSE, p. 19. DOI 10.6092/unibo/amsacta/4794. In: Quaderni - Working Paper DSE (500). ISSN 2282-6483.
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Abstract

The paper focuses on the signaling value of a tax when agents are less informed on the effect of their consumption than the policy-maker. When he chooses the tax, the policy-maker optimizes both the incentive effect and the effect on beliefs. We show that optimal taxes under symmetric information are not implementable under asymmetric information. The tax distortion required for credibility depends on the marginal cost of public funds and brings to undertaxation.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Barigozzi, Francesca
Villeneuve, Bertrand
Keywords
tax policy, marginal cost of public funds, information bias, signaling
Subjects
ISSN
2282-6483
DOI
Deposit date
09 Mar 2016 15:18
Last modified
09 Mar 2016 15:18
URI

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