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Charity, status, and optimal taxation: welfarist and non-welfarist approaches
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
Department of Economics, School of Business, Economics and Law, University of Gothenburg, Gothenburg, Sweden.
Department of Economics, University of Graz, Austria.
2024 (English)In: Journal of Political Economy Microeconomics, ISSN 2832-9368, Vol. 2, no 4, p. 747-785Article in journal (Refereed) Published
Abstract [en]

This paper analyzes optimal taxation of charitable giving to a public good in a Mirrleesianframework with social comparisons. When there are no transaction costs of giving, charitablegiving should be subsidized to such an extent that government contributions are completelycrowded out, regardless of whether the government is welfarist or non-welfarist, in whichcase it does not acknowledge the warm glow of giving. Under welfarism, stronger concernsfor relative charitable giving support lower marginal subsidies, whereas relative consumptionconcerns work in the opposite direction. We also show that a simple flat-rate subsidy isoptimal under welfarism, while the marginal subsidy increases in income under nonwelfarism.

Place, publisher, year, edition, pages
University of Chicago Press, 2024. Vol. 2, no 4, p. 747-785
Keywords [en]
Conspicuous charitable giving, conspicuous consumption, optimal taxation, public good provision, warm glow
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-220706DOI: 10.1086/732128OAI: oai:DiVA.org:umu-220706DiVA, id: diva2:1836356
Funder
Marianne and Marcus Wallenberg Foundation, 2015.0037Available from: 2024-02-08 Created: 2024-02-08 Last updated: 2024-12-05Bibliographically approved

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Aronsson, Thomas

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CiteExportLink to record
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Citation style
  • apa
  • ieee
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Language
  • de-DE
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  • en-US
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  • nn-NO
  • nn-NB
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  • Other locale
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