Working Paper Series, Department of Economics, Uppsala University
No 2010:12:
Bling Bling Taxation and the Fiscal Virtues of Hip Hop
Per Engström ()
Abstract: The paper extends Ng’s (1987) model of optimal taxation of
diamond goods — goods that are valued solely for their costliness. We
extend his findings by analyzing how other goods should be taxed in the
presence of pure diamond goods; modified Ramsey rules are derived in a
basic single-type model as well as in a two-type model with redistribution.
One key finding, that may be surprising and rather provoking, is that close
complements (hip hop music) to diamond goods (bling bling) should be
heavily subsidized.
Keywords: optimal taxation; status; luxury taxation; (follow links to similar papers)
JEL-Codes: H20; H21; (follow links to similar papers)
12 pages, August 17, 2010
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