Ramsey Taxation in the Global Economy
32 Pages Posted: 26 Feb 2018
Date Written: February 2018
Abstract
We study cooperative optimal Ramsey equilibria in the open economy addressing classic policy questions: Should restrictions be placed to free trade and capital mobility? Should capital income be taxed? Should goods be taxed based on origin or destination? What are desirable border adjustments? How can a Ramsey allocation be implemented with residence-based taxes on assets? We characterize optimal wedges and analyze alternative policy implementations.
Keywords: Capital income tax; free trade; value-added taxes; border adjustment; origin- and destination-based taxation; production e
JEL Classification: E60, E61, E62
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