On policy relevance of Ramsey tax rules

Selim, Sheikh Tareq ORCID: https://orcid.org/0000-0002-7931-092X 2006. On policy relevance of Ramsey tax rules. [Working Paper]. Cardiff Economics Working Papers, Cardiff: Cardiff University. Available at: http://business.cardiff.ac.uk/sites/default/files/...

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Abstract

The Ramsey approach to optimal taxation and Ramsey tax rules have amassed substance in economic theory. However, they are often criticized on grounds of practicality, fairness, feasibility and some other aspects of designing actual tax policy. This paper contests these criticisms; it discusses how closely or remotely Ramsey rules are followed in designing tax policy. It argues that the most of these common criticisms, be it realistic, such as administrative and compliance costs, or be it rather abstract, such as fairness, are either unimportant or irrelevant for Ramsey taxation. The more important inadequacy of the traditional Ramsey tax models is the selective modelling of incentive effects of tax reforms and their limited applicability for designing tax policy in developing countries.

Item Type:	Monograph (Working Paper)
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HG Finance
Uncontrolled Keywords:	Optimal taxation, Ramsey tax rules, Policy relevance.
Additional Information:	E2006/19
Publisher:	Cardiff University
Related URLs:	Organisation
Date of First Compliant Deposit:	30 March 2016
Last Modified:	24 Oct 2022 09:53
URI:	https://orca.cardiff.ac.uk/id/eprint/42496

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