Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18676
Authors: 
Richter, Wolfram F.
Year of Publication: 
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

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