This article provides optimal labour and dividend income taxation in a general equilibrium model with oligopolistic competition and endogenous firms’ entry. In the long run, the optimal dividend income tax corrects for inefficient entry. The dividend income tax depends on the form of competition and the nature of the sunk entry costs. In particular, it is higher in market structures characterised by competition in quantities rather than those characterised by price competition. Oligopolistic competition leads to an endogenous countercyclical price markup. As a result, offsetting the distortions over the business cycle requires deviations from full tax smoothing.
Colciago, A. (2016). Endogenous Market Structures and Optimal Taxation. THE ECONOMIC JOURNAL, 126(594), 1441-1483 [10.1111/ecoj.12293].
Endogenous Market Structures and Optimal Taxation
COLCIAGO, ANDREA
Primo
2016
Abstract
This article provides optimal labour and dividend income taxation in a general equilibrium model with oligopolistic competition and endogenous firms’ entry. In the long run, the optimal dividend income tax corrects for inefficient entry. The dividend income tax depends on the form of competition and the nature of the sunk entry costs. In particular, it is higher in market structures characterised by competition in quantities rather than those characterised by price competition. Oligopolistic competition leads to an endogenous countercyclical price markup. As a result, offsetting the distortions over the business cycle requires deviations from full tax smoothing.File | Dimensione | Formato | |
---|---|---|---|
Colciago-2015-The_Economic_Journal.pdf
accesso aperto
Descrizione: Articolo
Tipologia di allegato:
Author’s Accepted Manuscript, AAM (Post-print)
Dimensione
535.91 kB
Formato
Adobe PDF
|
535.91 kB | Adobe PDF | Visualizza/Apri |
Colciago-2016-The_Economic_Journal.pdf
Solo gestori archivio
Tipologia di allegato:
Publisher’s Version (Version of Record, VoR)
Dimensione
515.83 kB
Formato
Adobe PDF
|
515.83 kB | Adobe PDF | Visualizza/Apri Richiedi una copia |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.