SFB 303 Discussion Paper No. A - 067

Author: Ebert, Udo
Title: On the Evaluation of Tax Systems
Abstract: It is the aim of this paper to derive measures of excess burden by a simple axiomatic approach. The investigation is based on the fact that we are not interested in the entire welfare change of the consumer but rather in the change in excess of revenue collected. Thus in a first step we have to evaluate the tax paid by the consumer and the change of his welfare implied by the imposition of a tax. Afterwards both evaluations have to be combined in order to measure the excess burden. Thus we employ two concepts: one is the measure of welfare change, the other is the amount of tax paid. It will be shown that some few axioms suffice to characterize a measure of excess burden uniquely. It turns out that the only measure which satisfies the axioms proposed is a (generalization of) Kay's excess burden.
In the second part of the paper the results are generalized to the multi- consumer case.
Creation-Date: July 1986
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