Revenue equivalence and income taxation

Grimm V, Schmidt U (2000)


Publication Language: English

Publication Type: Journal article

Publication year: 2000

Journal

Publisher: Springer Verlag

Book Volume: 24

Pages Range: 56-63

Journal Issue: 1

URI: http://www.springerlink.com/content/c5g10g42t285j630/

DOI: 10.1007/BF02759695

Abstract

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.

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How to cite

APA:

Grimm, V., & Schmidt, U. (2000). Revenue equivalence and income taxation. Journal of Economics and Finance, 24(1), 56-63. https://doi.org/10.1007/BF02759695

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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