Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76438
Authors: 
Wrede, Matthias
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper 972
Abstract: 
This paper analyzes the treatment of commuting expenses by the income tax code from a normative and a positive point of view within a continuous space framework with endogenous residence choices and perfect labor mobility. As commuting expenses should never be deductible from the income tax base in a first-best world, deductibility might well be the outcome of a second-best-optimum-tax approach provided that not all factors of production were mobile. Non-deductibility might be justified by a lack of instruments to internalize environmental and congestion externalities or by perfect mobility of all production factors. However, the existence of deductions in many coun-tries can be easily explained within a public choice framework by redistribution from non-commuters to commuters.
Subjects: 
Income tax
relief
residential land use
labor mobility
commuting expenses
optimum taxation
JEL: 
H21
J61
R13
Document Type: 
Working Paper

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