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Commodity Taxation and International Trade in Imperfect Markets

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  • Andreas Haufler
  • Guttorm Schjelderup
  • Frank Stähler

Abstract

This paper studies non-cooperative commodity taxation in a trade model with imperfect competition and trade costs. Nationally optimal tax policy simultaneously tries to correct the domestic distortion from imperfect competition and to shift rents to the home country. Importantly, this trade-off depends qualitatively on the international commodity tax regime in operation. For low levels of trade costs, we show that production-based commodity taxes dominate from a global welfare perspective, but this ranking is reversed in favor of consumption-based taxation when trade costs become sufficiently high.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2000/wp-cesifo-2000-12/cesifo_wp376.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 376.

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Date of creation: 2000
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Handle: RePEc:ces:ceswps:_376

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Keywords: Commodity taxation; imperfect competition; strategic trade policy;

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References

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  1. Hagen, K.P. & Osmundsen, P. & Schjelderup, G., 1995. "Internationally Mobile Firms and Tax Policy," Papers, Norwegian School of Economics and Business Administration- 8/95, Norwegian School of Economics and Business Administration-.
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Citations

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Cited by:
  1. Petra Enß & Robert Schwager, 2006. "Kommunaler Finanzausgleich und Gewerbesteuerhebesätze in Niedersachsen," Departmental Discussion Papers, University of Goettingen, Department of Economics 127, University of Goettingen, Department of Economics.
  2. Andreas Haufler & Michael Pflüger, 2003. "International Commodity Taxation under Monopolistic Competition," Discussion Papers of DIW Berlin 332, DIW Berlin, German Institute for Economic Research.
  3. Haufler, Andreas & Schjelderup, Guttorm, 2004. "Tacit collusion and international commodity taxation," Journal of Public Economics, Elsevier, Elsevier, vol. 88(3-4), pages 577-600, March.
  4. Michael Keen & Sajal Lahiri & Pascalis Raimondos-Møller, 2001. "Tax Principles and Tax Harmonization under Imperfect Competition: A Cautionary Example," CESifo Working Paper Series 518, CESifo Group Munich.
  5. Salvatore Barbaro, 2003. "The Combined Effect of Taxation and Subsidization on Human Capital Investment," Departmental Discussion Papers, University of Goettingen, Department of Economics 116, University of Goettingen, Department of Economics.
  6. Renate Ohr, 2009. "European Monetary Union at Ten: Had the German Maastricht Critics Been Wrong?," Departmental Discussion Papers, University of Goettingen, Department of Economics 141, University of Goettingen, Department of Economics.
  7. Christos Kotsogiannis & Miguel-Angel Lopez-Garcia, 2005. "Imperfect Competition, Indirect Tax Harmonization and Public Goods," Discussion Papers, Exeter University, Department of Economics 0501, Exeter University, Department of Economics.
  8. Thies Büttner & Robert Schwager, 2003. "Regionale Verteilungseffekte der Hochschulfinanzierung und ihre Konsequenzen," Departmental Discussion Papers, University of Goettingen, Department of Economics 119, University of Goettingen, Department of Economics.
  9. Salvatore Barbaro, 2002. "The Distributional Impact of Subsidies to Higher Education - Empirical Evidence from Germany," Departmental Discussion Papers, University of Goettingen, Department of Economics 114, University of Goettingen, Department of Economics.
  10. Ourania Karakosta & Christos Kotsogiannis & Miguel-Angel Lopez-Garcia, 2009. "Does Indirect Tax Harmonization Deliver Pareto Improvements in the Presence of Global Public Goods?," CESifo Working Paper Series 2668, CESifo Group Munich.
  11. Corinna Ahlfeld, 2009. "The scapegoat of heterogeneity - How fragmentation influences political decisionmaking," Departmental Discussion Papers, University of Goettingen, Department of Economics 143, University of Goettingen, Department of Economics.
  12. Salvatore Barbaro & Jens Südekum, 2004. "Reforming a complicated income tax system: The political economics perspective," Departmental Discussion Papers, University of Goettingen, Department of Economics 120, University of Goettingen, Department of Economics.

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