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| Ramon J. Torregrosa-Montaner |
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| ''Lump-sum over Distortionary Taxation Dominance with Heterogeneous Individuals'' |
| ( 2015, Vol. 35 No.3 ) |
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| The dominance of lump-sum over distortionary taxation for the single consumer case is a well-known proposition in microeconomics. This result implies that if the consumer is asked about what tax she would pay to bear a given tax burden, she would choose lump-sum taxation. This paper provides a version of this dominance of lump-sum taxation for the case of several heterogeneous individuals by means of a game where the government allows each individual to choose between the two tax regimes. |
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| Keywords: Lump-sum taxation, distortionary taxation, pure strategy Nash equilibrium. |
JEL: H3 - Fiscal Policies and Behavior of Economic Agents: General
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| Manuscript Received : Jun 10 2015 | | Manuscript Accepted : Jul 11 2015 |
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