Cascading, revenue neutrality and the VAT: Some theoretical results
AbstractThe conventional conclusion is that, ceteris paribus, a revenue-neutral VAT would have no impact on the aggregate price level, unless it elicits a supply response due to a lower degree of distortions. This paper shows that even if we ignore supply response, a revenue-neutral VAT can lead to higher output and lower price in a demand-constrained output regime. However, price will remain unchanged in a supply-constrained output regime.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Institute of Public Finance and Policy in its series Working Papers with number 97/3.
Date of creation: Apr 1997
Date of revision:
Note: Working Paper 3, 1997
Contact details of provider:
Web page: http://www.nipfp.org.in
Value added tax;
Find related papers by JEL classification:
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (S.Siva Chidambaram).
If references are entirely missing, you can add them using this form.