Ramsey Taxation in the Global Economy

Chari, V. V.; Nicolini, Juan Pablo; Teles, Pedro

doi:10.21034/wp.745

Working Paper

Ramsey Taxation in the Global Economy

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 efficiency;

JEL Classification: E60; E61; E62;

https://doi.org/10.21034/wp.745