| 1. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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A note on optimal taxation, status consumption, and unemployment
- 2021
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Ingår i: Journal of Public Economics. - : Elsevier BV. - 0047-2727 .- 1879-2316. ; 200
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Tidskriftsartikel (refereegranskat)abstract
- Existing research on optimal taxation in economies with status-driven relative consumption (implicitly) assumes that there is no involuntary unemployment, despite ample evidence that real world labor markets are typically characterized by such unemployment. We show how the marginal tax policy ought to be modified to simultaneously account for positional consumption externalities and equilibrium unemployment, and find that interaction effects between these two market failures are crucial determinants of the marginal tax structure. In certain cases, the policy incentive to tax away positional externalities vanishes completely, and negative positional externalities may even lead to lower marginal taxation, under involuntary unemployment. (c) 2021 Elsevier B.V. All rights reserved.
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| 2. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Inequality Aversion, Externalities, and Pareto-Efficient Income Taxation
- 2020
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper analyzes Pareto-efficient marginal income taxation taking into account externalities induced through individual inequality aversion, meaning that people have preferences for equality. In doing so, we distinguish between four different and widely used models of inequality aversion. The results show that empirically and experimentally quantified degrees of inequality aversion have potentially very strong implications for Pareto-efficient marginal income taxation. It also turns out that the type of inequality aversion (self-centered vs. non-self-centered), and the specific measures of inequality used, matter a great deal. For example, based on simulation results mimicking the disposable income distribution in the U.S., the preferences suggested by Fehr and Schmidt (1999) imply monotonically increasing marginal income taxes, with large negative marginal tax rates for low-income individuals and large positive marginal tax rates for high-income ones. In contrast, the in many respects comparable model by Bolton and Ockenfels (2000) implies close to zero marginal income tax rates for all.
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| 3. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Social Comparisons and Optimal Taxation in a Small Open Economy
- 2019
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Ingår i: Scandinavian Journal of Economics. - : John Wiley & Sons. - 0347-0520 .- 1467-9442. ; 121:4, s. 1500-1532
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we analyze how international capital mobility affects the optimal labor and capital income tax policy in a small open economy when consumers care about relative consumption. The main results crucially depend on whether the government can tax returns on savings abroad. If the government can use flexible residence-based capital income taxes, then the optimal policy rules from a closed economy largely carry over to the case of a small open economy. If it cannot, then capital income taxes become completely ineffective. The labor income taxes must then indirectly also reflect the corrective purpose that the absent capital income tax would have had.
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| 4. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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State-variable public goods and social comparisons
- 2014
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Ingår i: Journal of Environmental Economics and Management. - : Elsevier. - 0095-0696 .- 1096-0449. ; 68:2, s. 390-410
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Tidskriftsartikel (refereegranskat)abstract
- The optimal provision of a state-variable public good, where the global climate is the prime example, is analyzed in a model where people care about their relative consumption. We consider both keeping-up-with-the-Joneses preferences (where people compare their own current consumption with others’ current consumption) and catching-up-with-the-Joneses preferences (where people compare their own current consumption with others’ past consumption) in an economy with two productivity types, overlapping generations, and optimal nonlinear income taxation. The extent to which the conventional rules for provision of state-variable public goods (a dynamic analog of the Samuelson rules) ought to be modified is shown to clearly depend on the strength of the relative concerns of both kinds, but also on the preference elicitation format.
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| 5. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Veblen's theory of the leisure class revisited: implications for optimal income taxation
- 2013
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Ingår i: Social Choice and Welfare. - : Springer Science and Business Media LLC. - 0176-1714 .- 1432-217X. ; 41:3, s. 551-578
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Tidskriftsartikel (refereegranskat)abstract
- Several previous studies have demonstrated the importance of relative consumption comparisons for public policy. Yet, almost all of them have ignored the role of leisure for status comparisons. Inspired by Veblen (The theory of the leisure class. Macmillan, New York, 1899), this paper assumes that people care about their relative consumption and that leisure has a displaying role in making relative consumption more visible, based on a two-type model of optimal income taxation. While increased importance of relative consumption typically implies higher marginal income tax rates, in line with previous research, the effect of leisure-induced consumption visibility is to make the income tax more regressive in terms of ability.
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| 6. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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When Samuelson Met Veblen Abroad: National and Global Public Good Provision when Social Comparisons Matter
- 2014
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Ingår i: Economica. - : Wiley. - 0013-0427 .- 1468-0335. ; 81:322, s. 224-243
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Tidskriftsartikel (refereegranskat)abstract
- This paper derives Pareto-efficient provision rules for national and global public goods in a two-country world, where each individual cares about his or her relative consumption of private goods compared to other domestic and foreign residents. We contrast these rules with those following from a non-cooperative Nash equilibrium. Both national and global public goods are underprovided in Nash equilibrium under such relative consumption concerns. Finally, when individuals also care about the relative consumption of national public goods, based on between-country comparisons, the optimal provision rule depends on whether or not the national public goods are less positional than private consumption. EL AB, 2005, REV ECON STUD, V72, P1
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| 7. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Paternalism against Veblen: Optimal Taxation and Non-respected Preferences for Social Comparisons
- 2018
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Ingår i: American Economic Journal-Economic Policy. - : American Economic Association. - 1945-7731 .- 1945-774X. ; 10:1, s. 39-76
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Tidskriftsartikel (refereegranskat)abstract
- This paper compares optimal nonlinear income tax policies of welfarist and paternalist governments, where the latter does not respect individual preferences regarding relative consumption. Consistent with previous findings, relative consumption concerns typically induce a welfarist government to increase the marginal tax rates to internalize positional externalities. Remarkably, the optimal marginal tax rules are often very similar in the paternalist case, where such externalities are not taken into account. We identify several cases where the marginal tax rules are indeed identical between the governments. Numerical simulations show that marginal and average tax levels and the overall redistribution are often also similar.
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| 8. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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A maximum likelihood bunching estimator of the elasticity of taxable income
- 2023
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Ingår i: Journal of applied econometrics (Chichester, England). - : John Wiley & Sons. - 0883-7252 .- 1099-1255.
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Tidskriftsartikel (refereegranskat)abstract
- This paper develops a maximum likelihood (ML) bunching estimator of the elasticity of taxable income (ETI). Our structural approach provides a natural framework to simultaneously account for unobserved preference heterogeneity and optimization errors and for measuring their relative importance. We characterize the conditions under which the parameters of the model are identified and show that the ML estimator performs well in terms of bias and precision. The paper also contains an empirical application using Swedish data, showing that both the ETI and the standard deviation of the optimization friction are precisely estimated, albeit relatively small.
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| 9. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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A note on optimal paternalism and health capital subsidies
- 2008
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Ingår i: Economics Letters. - : Elsevier. - 0165-1765 .- 1873-7374. ; 101:3, s. 241-242
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Tidskriftsartikel (övrigt vetenskapligt/konstnärligt)abstract
- This paper concerns the policy implications of a potential self-control problem underlying the consumption of unhealthy food. Our results show that subsidies on wealth and healthcapital can be used to implement a socially optimal resource allocation.
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| 10. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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A Note on Optimal Taxation, Status Consumption, and Unemployment
- 2020
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Existing research on optimal taxation in economies with status-driven relative consumption assumes that the labor market is competitive, despite the fact that real world labor markets are typically characterized by involuntary unemployment. We show how the marginal tax policy ought to be modified to simultaneously account for positional consumption externalities and equilibrium unemployment, and find that interaction effects between these two market failures are crucial determinants of the marginal tax structure. In certain cases, the policy incentive to tax away positional externalities vanishes completely, and negative positional externalities may even lead to lower marginal taxation, under involuntary unemployment.
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