Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129699
Authors: 
Olovsson, Conny
Year of Publication: 
2014
Series/Report no.: 
Sveriges Riksbank Working Paper Series 284
Abstract: 
Optimal taxes for Europe and the U.S. are derived in a realistically calibrated model in which agents buy consumption goods and services and use home capital and labor to produce household services. The optimal tax rate on services is substantially lower than the tax rate on goods. Specifically, the planner cannot tax home production directly and instead lowers the tax rate on market services to increase the relative price of home production. The optimal tax rate on the return to home capital is strictly positive and the welfare gains from switching to optimal taxes are large.
Subjects: 
Optimal Taxation
Household Production
Time Allocation
Labor Supply
JEL: 
D13
H21
J22
Document Type: 
Working Paper

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