Destination- versus Origin-based Commodity Taxation and the Location of Industry
AbstractThis Paper studies the positive aspects of destination vs. origin principles of commodity taxation as well as tax harmonization, with an emphasis on the international implications of these measures when firms are mobile. We investigate the tax incidence of these two principles on price levels and uncover how taxes and trade costs interact. While under the destination principle an increase in the tax rate of a country always causes some firms to relocate to the other, this effect may get reversed under the origin principle when economic integration is deep enough, so that a tax increase leads to an inflow of capital.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4671.
Date of creation: Oct 2004
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Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-02-13 (All new papers)
- NEP-GEO-2005-02-13 (Economic Geography)
- NEP-PBE-2005-02-13 (Public Economics)
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- MORICONI, Simone & SATO, Yasuhiro, 2006.
"International commodity taxation in the presence of unemployment,"
CORE Discussion Papers
2006069, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Moriconi, Simone & Sato, Yasuhiro, 2009. "International commodity taxation in the presence of unemployment," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 939-949, August.
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