Charity, Status, and Optimal Taxation: Welfarist and Non-Welfarist Approaches

• This paper analyzes optimal taxation of charitable giving to a public good in a Mirrleesian framework with social comparisons. Leisure separability together with zero transaction costs of giving imply that charitable giving should be subsidized to such an extent that governmental contributions are completely crowded out, regardless of whether the government acknowledges warm glows of giving. Stronger concerns for relative charitable giving and larger transaction costs support lower marginal subsidies, whereas relative consumption concerns work in the other direction. A dual screening approach, where charitable giving constitutes an indicator of wealth, is also presents. Numerical simulations supplement the theoretical results.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Conspicuous consumption

conspicuous charitable giving

optimal taxation

public good provision

warm glow

multiple screening

Economics

nationalekonomi

Conspicuous consumption

conspicuous charitable giving

optimal taxation

public good provision

warm glow

multiple screening

Publikations- och innehållstyp

vet (ämneskategori)

rap (ämneskategori)