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- handle: 10670/1.2nh2qz
- halshs: halshs-01622337
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optimal taxation taxation of profits production efficiency H - Public Economics/H.H2 - Taxation, Subsidies, and Revenue/H.H2.H21 - Efficiency • Optimal TaxationSujets proches
Duties Fee system (Taxation) Taxation, Incidence of Tax reform Tax policy TaxesCiter ce document
Stéphane Gauthier et al., « Production Efficiency and Profit Taxation », HAL-SHS : économie et finance, ID : 10670/1.2nh2qz
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Résumé
Consider a simple general equilibrium economy with one representative consumer, a single competitive firm and the government. Suppose that the government has to finance public expenditures using linear consumption taxes and/or a lump-sum tax on profits redistributed to the consumer. This note shows that, if the tax rate on profits cannot exceed 100 percent, one cannot improve upon the second-best optimum of an economy with constant returns to scale by using a less efficient profit-generating decreasing returns to scale technology.