We present an analytical literature review on optimal sin taxes. After identifying the distinctive features of sin goods, we develop a simple, encompassing model of the taxation of sin goods that allows for treating the main models found in the literature as subcases. We derive the optimal sin tax rates, while also considering the subsidisation of healthy goods. We then discuss the Pareto-improvement result obtained in the theoretical literature, confronting it with the debate on the regressivity of this kind of taxation. We highlight the crucial role of the interaction of tastes, self-control problems and poverty when deriving policy conclusions from theoretical models.

Optimal taxation of sin goods: an analytical review / Antonelli, M. A.; Castaldo, A.; De Bonis, V.; Gandolfo, A.. - In: JOURNAL OF PUBLIC FINANCE AND PUBLIC CHOICE (PRINT). - ISSN 2515-6918. - 37:2(2022), pp. 232-259. [10.1332/251569121X16571984676251]

Optimal taxation of sin goods: an analytical review

Antonelli M. A.
Primo
;
Castaldo A.
Secondo
;
De Bonis V.
Penultimo
;
2022

Abstract

We present an analytical literature review on optimal sin taxes. After identifying the distinctive features of sin goods, we develop a simple, encompassing model of the taxation of sin goods that allows for treating the main models found in the literature as subcases. We derive the optimal sin tax rates, while also considering the subsidisation of healthy goods. We then discuss the Pareto-improvement result obtained in the theoretical literature, confronting it with the debate on the regressivity of this kind of taxation. We highlight the crucial role of the interaction of tastes, self-control problems and poverty when deriving policy conclusions from theoretical models.
2022
sin goods; optimal taxation; tax burden; consumer sovereignty;
01 Pubblicazione su rivista::01a Articolo in rivista
Optimal taxation of sin goods: an analytical review / Antonelli, M. A.; Castaldo, A.; De Bonis, V.; Gandolfo, A.. - In: JOURNAL OF PUBLIC FINANCE AND PUBLIC CHOICE (PRINT). - ISSN 2515-6918. - 37:2(2022), pp. 232-259. [10.1332/251569121X16571984676251]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/1657212
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