On the Intergenerational Incidence of Wage and Consumption Taxes
28 Pages Posted: 19 Feb 2001
Date Written: December 2000
This paper analyzes the intergenerational incidence of wage and consumption taxes imposed to finance a given amount of public expenditures. It employs a continuous time overlapping generations framework to demonstrate that it essentially hinges on the relationship between the age-earnings and age-consumption profiles of the households which generations bear the major burden of wage respectively consumption taxes. Furthermore, the paper points to some political economy implications of the incidence of wage and consumption taxes.
Keywords: Intergenerational incidence, wage and consumption taxes, life cycle model
JEL Classification: D91, E62, H22
Suggested Citation: Suggested Citation