Journal article

Revenue equivalence and income taxation

Publication Details
Author(s): Grimm V, Schmidt U
Publisher: Springer Verlag
Publication year: 2000
Volume: 24
Journal issue: 1
Pages range: 56-63
ISSN: 1055-0925
eISSN: 1938-9744
Language: English


This paper considers the classical independent private values model of auction theory in the presence of income taxation. We show that revenue equivalence remains valid if income taxes are proportional. Progressive and regressive taxes lead, in general, to asymmetries between bidders with the well-known consequence that revenue equivalence no longer holds. However, if symmetry of the bidders is maintained, progressive (regressive) income tax implies a higher (lower) expected revenue in first-price than in second-price auctions.

Focus Area of Individual Faculties

How to cite
APA: Grimm, V., & Schmidt, U. (2000). Revenue equivalence and income taxation. Journal of Economics and Finance, 24(1), 56-63.

MLA: Grimm, Veronika, and Ulrich Schmidt. "Revenue equivalence and income taxation." Journal of Economics and Finance 24.1 (2000): 56-63.

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