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From Destination- to Origin-Based Consumption Taxation: A Dynamic CGE Analysis

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  • Hans Fehr

Abstract

A switch from the current destination-based value-added taxation to an origin-based consumption tax will not be neutral in a world economy with international capital mobility and overlapping generations. This paper evaluates the macroeconomic and welfare effects of such a multilateral reform in a two-region, intertemporal general equilibrium model. The analysis isolates and quantifies income effects due to changes in generations' tax burdens, factor price repercussions and initial asset price adjustments, as well as efficiency effects that arise from endogenous labor supply and short run savings responses in a numerical simulation exercise. Copyright Kluwer Academic Publishers 2000

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  • Hans Fehr, 2000. "From Destination- to Origin-Based Consumption Taxation: A Dynamic CGE Analysis," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(1), pages 43-61, February.
    • Handle: RePEc:kap:itaxpf:v:7:y:2000:i:1:p:43-61
    DOI: 10.1023/A:1008754029145
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    1. Andreas Haufler & Søren Nielsen, 1997. "Dynamic effects of an anticipated switch from destination- to origin-based commodity taxation," Journal of Economics, Springer, vol. 66(1), pages 43-69, February.
    2. de Souza Ferreira Filho, Joaquim Bento & Bacha, Carlos José Caetano & Regazzini, Leonardo Coviello, 2021. "Tax exemption in Brazil in 2009: why vehicles and not agriculture? An interregional general equilibrium analysis," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    3. Tourinho, Octavio Augusto Fontes & Alves, Yann Le Boulluec & Silva, Napoleão Luiz Costa da, 2010. "Implicações Econômicas da Reforma Tributária: Análise com um Modelo CGE," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(3), September.

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