The paper focuses on the signaling value of a tax when agents are less informed than the government on the effect of their consumption. The policy-making process is analyzed as a game in which the government wants to influence consumers’ behaviors through tax policy, consumers being rational and Bayesian. The marginal cost of public funds induces the government to provide biased information to pursue budgetary objectives. We analyze the tax distortion which is required for credibility
F. Barigozzi, B. Villeneuve (2006). The Signaling Effect of Tax Policy. JOURNAL OF PUBLIC ECONOMIC THEORY, 8(4), 611-630 [10.1111/j.1467-9779.2006.00281.x].
The Signaling Effect of Tax Policy
BARIGOZZI, FRANCESCA;
2006
Abstract
The paper focuses on the signaling value of a tax when agents are less informed than the government on the effect of their consumption. The policy-making process is analyzed as a game in which the government wants to influence consumers’ behaviors through tax policy, consumers being rational and Bayesian. The marginal cost of public funds induces the government to provide biased information to pursue budgetary objectives. We analyze the tax distortion which is required for credibilityI documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
