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A literature review on optimal indirect taxation and the uniformity debate

Author

Listed:
  • Odd E. Nygard

    (Statistics Norway)

  • John T. Revesz

    (Australian Public Service)

Abstract

A review of the theoretical literature on optimal indirect taxation reveals that analytical arguments in favor of uniform indirect taxation seem rather weak and unrealistic; hence determining the optimal tax structure remains an empirical issue. However, reviewing the empirical-computational studies pub¬lished so far, shows that most of them operate under rather restrictive and simplistic frameworks. There is little computational support for uniformity, particularly when the models approach real world com¬plexity. It appears that in a many-consumer economy, differentiated and progressive indirect taxation is likely to be the optimal solution

Suggested Citation

  • Odd E. Nygard & John T. Revesz, 2016. "A literature review on optimal indirect taxation and the uniformity debate," Hacienda Pública Española / Review of Public Economics, IEF, vol. 218(3), pages 107-140, September.
    • Handle: RePEc:hpe:journl:y:2016:v:218:i:3:p:107-140
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Optimal taxation; commodity taxation; indirect taxation; tax evasion;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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