Welfare, Revenue and Indirect Tax Harmonization under the Origin Principle
AbstractThis paper discusses whether some propositions concerning the effects of indirect tax harmonization that have been derived when taxes are levied on a destination basis and revenue is returned to the individuals as a lump-sum transfer can, when accurately reformulated, be extended to a framework where commodities are taxed according to the origin principle and the governments use their revenue to finance the purchase of goods and services. Using a two-country model, it is argued that a non-uniform proportional convergence of domestic taxes towards a properly designed «average » tax structure can be characterized as potentially Pareto-improving. However, these reforms will not, in general, lead to a strict Pareto-improvement where every country is better off without any need for international transfers.
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Bibliographic InfoArticle provided by IEF in its journal Hacienda Pública Española/Revista de Economía Pública.
Volume (Year): 168 (2004)
Issue (Month): 1 (marzo)
: indirect tax harmonization; origin principle; reform of commodity taxes.;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
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