Product Quality and the Optimal Structure of Commodity Taxes
AbstractThe comparison between ad valorem and specific taxation is among the oldest issues in formal public finance and is important for policy in the European Union (EU) and elsewhere. This paper develops and articulates simple but very general elasticity rules that characterize the optimal balance between the two in a model of endogenous product quality. These rules temper the preference for ad valorem taxation that emerges from homogeneous product models, pointing to relatively heavy reliance on whichever form of taxation has the least effect on product quality. Copyright 2006 Blackwell Publishing, Inc..
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Bibliographic InfoArticle provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.
Volume (Year): 8 (2006)
Issue (Month): 4 (October)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1097-3923
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- Laszlo Goerke, 2011.
"Commodity Tax Structure under Uncertainty in a Perfectly Competitive Market,"
CESifo Working Paper Series
3339, CESifo Group Munich.
- Laszlo Goerke, 2011. "Commodity tax structure under uncertainty in a perfectly competitive market," Journal of Economics, Springer, vol. 103(3), pages 203-219, July.
- Laszlo Goerke & Frederik Herzberg & Thorsten Upmann, 2012.
"Failure of Ad Valorem and Specific Tax Equivalence under Uncertainty,"
CESifo Working Paper Series
3946, CESifo Group Munich.
- Laszlo Goerke & Frederik Herzberg & Thorsten Upmann, 2012. "Failure of Ad Valorem and Specific Tax Equivalence under Uncertainty," IAAEU Discussion Papers 201205, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
- Ramón Torregrosa, 2008. "Macroeconomic effects of an indirect tax substitution," Journal of Economics, Springer, vol. 94(3), pages 199-221, September.
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