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Paolo M. Panteghini
''On the equivalence between labor and consumption taxation''
( 2009, Vol. 29 No.2 )
This article studies the equivalence between labor and consumption taxes in a stochastic context, where the government can undertake an active portfolio management strategy by investing in both risk-free and risky assets. Using a two-period model we have shown that such taxes let consumers make the same decisions and can finance the same amount of government spending in each period.
Keywords: consumption and labor taxation, equivalence, risk.
JEL: H4 - Publicly Provided Goods: General
Manuscript Received : Mar 09 2009 Manuscript Accepted : Apr 17 2009

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