Titlebook: Consumer Behavior, Cost of Living Measures, and the Income Tax; Michael R. Baye,Dan A. Black Book 1986 Springer-Verlag Berlin Heidelberg 1

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Changes in Government Goods and the Tax Code consumer may receive benefits from taxes (eg., public goods), and the government may from time to time change the tax code. This chapter provides a brief look at these issues, and shows how earlier results may be extended to deal with the issues. We consider first the issue of government goods, and

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Introductions of pretax income necessary to maintain some base standard of living under alternative price and tax regimes. This is in contrast to an expenditure-based index of the cost of living, which is designed to compare the expenditures (exclusive of taxes) necessary to maintain the base standard of living under alternative price regimes.

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Mathematical Preliminariesy. for all i and x. > y. for some j.” Similarly, for two sets S and V, “S . V” means that “xεS implies xεV;” that is, S is a subset of V. The notation S c V means every x in the set S is also contained in V, but there exists an element of V that is not contained in S; in other words, S is a proper subset of V.

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Consumer Behavior in the Absence of an Income Taxisure, and is contained on the interval [0, δ]. The scalar δ represents the individual’s total endowment of time. The X.′s [k = 1, 2,… n] are interpreted as commodities, and are elements of R.. Thus the consumption set of the individual is taken to be ..

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Changes in Government Goods and the Tax Coderief look at these issues, and shows how earlier results may be extended to deal with the issues. We consider first the issue of government goods, and then the issue of tax code changes. Finally, some preliminary results concerning the indexation of tax codes are presented.

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