Inflation, Tariffs and Tax Enforcement Costs
AbstractThis paper derives the dependency of optimal tariff and inflation tax on tax collection and enforcement costs. The analysis is done for a small, open economy. The existence of such costs can justify tariff and inflation tax policies as optimal revenue-raising devices. This paper suggests that greater government demand for revenue will increase the use of inflation and tariffs as revenue devices. The analysis derives elasticity rules that tie optimal tariff and inflation rates to the costs of tax collection.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1712.
Date of creation: Oct 1985
Date of revision:
Publication status: published as Aizenman, Joshua. "Inflation, Tariffs and Tax Enforcement Costs," Journal of International Economic Integration, Vol. 2, No. 2, pp. 12-28, (Autumn 1987).
Note: ITI IFM
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- Siegel, Jeremy J., 1978. "Notes on optimal taxation and the optimal rate of inflation," Journal of Monetary Economics, Elsevier, vol. 4(2), pages 297-305, April.
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- Joshua Aizenman, 1985.
"On the Complementarity of Commercial Policy, Capital Controls and Inflation Tax,"
NBER Working Papers
1583, National Bureau of Economic Research, Inc.
- Joshua Aizenman, 1986. "On the Complementarity of Commercial Policy, Capital Controls, and Inflation Tax," Canadian Journal of Economics, Canadian Economics Association, vol. 19(1), pages 114-33, February.
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- Derek Hung Chiat Chen, 2003. "Intertemporal excess burden, bequest motives, and the budget deficit," Policy Research Working Paper Series 3086, The World Bank.
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