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2006-09-25Buch DOI: 10.18452/4000
The Welfare Enhancing Effects of a Selfish Government in the Presence of Uninsurable, Idiosyncratic Risk
dc.contributor.authorBraun, R. Anton
dc.contributor.authorUhlig, Harald
dc.date.accessioned2017-06-15T23:16:49Z
dc.date.available2017-06-15T23:16:49Z
dc.date.created2006-09-27
dc.date.issued2006-09-25
dc.identifier.issn1860-5664
dc.identifier.urihttp://edoc.hu-berlin.de/18452/4652
dc.description.abstractThis paper poses the following question: Is it possible to improve welfare by increasing taxes and throwing away the revenues? This paper demonstrates that the answer to this question is “yes.” We show that there may be welfare gains from taxing capital income even when the additional capital income tax revenues are wasted or consumed by a selfish government. Previous literature has assumed that government expenditures are exogenous or productive, or allowed for redistribution of tax revenue either via lump-sum transfers, unemployment compensation or other redistributive schemes. In our model a selfish government taxes capital above a given threshold and then consumes the proceeds. This raises the before-tax real return on capital and and thereby enhances the ability of agents to self-insure when they are long-term unemployed and have low savings. Since all agents have positive probability of finding themselves in that state there are cases where all agents prefer a selfish government to no government at all.eng
dc.language.isoeng
dc.publisherHumboldt-Universität zu Berlin, Wirtschaftswissenschaftliche Fakultät
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/
dc.subjectredistributioneng
dc.subjectCapital income taxeng
dc.subjectselfish governmenteng
dc.subjectwelfare improvementeng
dc.subject.ddc330 Wirtschaft
dc.titleThe Welfare Enhancing Effects of a Selfish Government in the Presence of Uninsurable, Idiosyncratic Risk
dc.typebook
dc.identifier.urnurn:nbn:de:kobv:11-10068841
dc.identifier.doihttp://dx.doi.org/10.18452/4000
dc.subject.dnb17 Wirtschaft
local.edoc.container-titleSonderforschungsbereich 649: Ökonomisches Risiko
local.edoc.pages27
local.edoc.type-nameBuch
local.edoc.container-typeseries
local.edoc.container-type-nameSchriftenreihe
local.edoc.container-volume2006
local.edoc.container-issue70
local.edoc.container-year2006
local.edoc.container-erstkatid2195055-6

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