We study optimal commodity taxation in economies with inattentive consumers. In our setting, consumers may make both random and systematic mistakes relative to the frictionless benchmark; they may allocate attention differently across markets; they may exhibit behavior akin to sparsity or mental accounting. Inattention is however rational (Sims, 2003). This delivers an irrelevance result — optimal taxes may satisfy the same sufficient-statistics formulas as those in classical public finance (Ramsey, 1927; Diamond and Mirrlees, 1971b; Diamond, 1975). Put simply, a benevolent Ramsey planner should not care whether agents are inattentive or what’s “under the hood” of the observed market-level demands. We discuss the conditions that sustain this result, its possible violations, and its relation to behavioral public finance.
