The VAT versus the turnover tax with non-competitive firms

This file is part of IDEAS, which uses RePEc data

The VAT versus the turnover tax with non-competitive firms

Author Info

Arindam Das-Gupta () (Goa Institute of Management)

Abstract

The VAT is compared to a turnover tax (TT) given monopoly final goods and intermediate goods firms interacting strategically. Linear demands and constant costs are assumed. Via examples it is shown that for both "Cournot" and "Stackelberg" games, a revenue neutral VAT may not exist to a given turnover tax; and the TT can dominate the VAT simultaneously in welfare, revenue and output terms. In other examples it is shown that the VAT dominating the TT by all three indicators is also possible. It is also shown that outcomes are identical to the "Cournot" game when the consumer goods firm is the strategic leader. When the intermediate goods firm is the leader, intermediate price distortion is lower and welfare higher than in the "Cournot" game under both taxes; and the output neutral VAT rate to any feasible TT rate is higher than in the "Cournot" game.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info
Paper provided by National Institute of Public Finance and Policy, New Delhi, India in its series National Institute of Public Finance and Policy, New Delhi Working Papers with number 21.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 23 pages
Date of creation: Jul 2004
Date of revision:
Handle: RePEc:ind:nipfwp:21

Contact details of provider:
Postal: 18/2, Satsang Vihar Marg, Special Institutional Area, New Delhi
Phone: (011) 26563688, 26569780
Fax: (011) 26852548
Email:
Web page: http://www.nipfp.org.in
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Shamprasad M. Pujar).

Find related papers by JEL classification:
D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Ira N. Gang & Arindam Das-Gupta, 1998. "Value Added Tax Evasion, Auditing and Transactions Matching," Departmental Working Papers 199607, Rutgers University, Department of Economics. [Downloadable!]
Ira N. Gang & Arindam Das-Gupta, 1998. "A Comparison of Sales Taxes," Departmental Working Papers 199519, Rutgers University, Department of Economics.
Dasgupta, Partha & Stiglitz, Joseph E, 1972. "On Optimal Taxation and Public Production," Review of Economic Studies, Blackwell Publishing, vol. 39(1), pages 87-103, January. [Downloadable!] (restricted)
Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March. [Downloadable!] (restricted)
Newbery, David M., 1986. "On the desirability of input taxes," Economics Letters, Elsevier, vol. 20(3), pages 267-270. [Downloadable!] (restricted)

Full references

Statistics
Access and download statistics

Did you know? There are over 16000 authors registered on RePEc Author Service.

This page was last updated on 2008-7-3.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.