Using a collective model of consumption, we characterize optimal commodity taxes aimed at targeting specific individuals within the household. The main message is that distortionary indirect taxation can circumvent the agency problem of the household. Essentially, taxation should discourage less the consumption of a certain group of goods: those for which the slope of the Engel curves is larger for the targeted person.
We use Google Analytics in compliance with German Data Protection Law. The site gathers data for the sole purpose of improving its services. You're able to decline now or later. By using our services, you agree to our use of cookies. You'll find more information here.