The marginal value of public funds: a brief guide and application to tax policy

This paper provides a brief and accessible guide to the Marginal Value of Public Funds (MVPF) and offers some new perspectives on its application to the evaluation of tax policy. Specifically, the paper aims to: (i) bridge the gap between traditional uses of the Marginal Cost of Public Funds and the...

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Published inInternational tax and public finance
Main Author Bastani, Spencer
Format Journal Article
LanguageEnglish
Published 2024
Subjects
Economics
Nationalekonomi
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Summary:This paper provides a brief and accessible guide to the Marginal Value of Public Funds (MVPF) and offers some new perspectives on its application to the evaluation of tax policy. Specifically, the paper aims to: (i) bridge the gap between traditional uses of the Marginal Cost of Public Funds and the growing interest in the MVPF approach, (ii) highlight the crucial link between the MVPF and tax policy, (iii) critically discuss empirical quantification, particularly with respect to tax elasticities, and (iv) explore distributional considerations and their connection to the literature on optimal redistributive taxation.
ISSN:1573-6970
0927-5940
DOI:10.1007/s10797-024-09860-x