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  • 2019
  • Working Paper
  • HBS Working Paper Series

Understanding Different Approaches to Benefit-Based Taxation

By: Robert Scherf and Matthew C. Weinzierl
  • Format:Print
  • | Language:English
  • | Pages:23
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Abstract

The normative principle of benefit-based taxation has exerted substantial influence on many areas of public finance, but it has been largely set aside in the modern theoretical approach to optimal income taxation, where welfarist objectives dominate. A prerequisite for that gap to close is the clarification of what benefit-based income taxation would mean, specifically in a first-best setting. This paper seeks to provide clear, accessible descriptions and novel graphical representations of four major approaches to first-best benefit-based taxation, explain how these approaches relate to each other, and apply them within the Classical Benefit-Based framework for optimal income taxation of Smith (1776).

Keywords

Benefit-based Taxation; Taxation; Theory

Citation

Scherf, Robert, and Matthew C. Weinzierl. "Understanding Different Approaches to Benefit-Based Taxation." Harvard Business School Working Paper, No. 19-070, January 2019. (Revised August 2019.)
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About The Author

Matthew C. Weinzierl

Business, Government and the International Economy
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Related Work

    • June 2020
    • Fiscal Studies: The Journal of Applied Public Economics

    Understanding Different Approaches to Benefit-Based Taxation

    By: Robert Scherf and Matthew C. Weinzierl
Related Work
  • Understanding Different Approaches to Benefit-Based Taxation By: Robert Scherf and Matthew C. Weinzierl
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