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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18676
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| Title: | | Efficiency effects of tax deductions for work-related expenses  |
| Authors: | | Richter, Wolfram F. |
| Issue Date: | | 2004 |
| Series/Report no.: | | CESifo working papers 1311 |
| Abstract: | | In this paper it is shown that allowing the deduction of work-related expenses has a strictly positive effect on tax efficiency only if two conditions hold jointly: (i) The expenses should be interpretable as real cost and (ii) the expenses should be required for increasing taxable income. Otherwise deductions are inefficient, neutral or ambiguous. Thus it is argued that the cost of commuting to work should not be deductible as commuting does not increase taxable income. The efficiency enhancing effect of deducting other expenses like educational ones or expenses for housework and child care is challenged on the grounds that these expenses are largely pecuniary costs. |
| Subjects: | | income tax deductions commuting housework child care educational expenses efficient taxation production efficiency |
| JEL: | | H21 H24 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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