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Tax Exporting:An Analysis Using a Multiregional CGE Model

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  • Ana María Iregui

Abstract

This paper investigates whether developed countries export taxes to developing countries, contributing to the deterioration of their terms of trade and welfare; that is to what extent the distribution of gains from trade is being affected not by existing tariffs in developed countries, which are already at low levels but by their domestic taxation. An eight- region CGE model for the world economy is used. The results indicate that developed regions export capital taxes to developing regions. However, the effects of import tariffs on welfare and terms of trade are larger than those of domestic taxes.

Suggested Citation

  • Ana María Iregui, 2001. "Tax Exporting:An Analysis Using a Multiregional CGE Model," Borradores de Economia 171, Banco de la Republica de Colombia.
  • Handle: RePEc:bdr:borrec:171
    DOI: 10.32468/be.171
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    References listed on IDEAS

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    1. Damus, Sylvester & Hobson, Paul A. R. & Thirsk, Wayne R., 1991. "Foreign tax credits, the supply of foreign capital, and tax exporting : A numerical general equilibrium model of corporate tax reform in Canada," Journal of Public Economics, Elsevier, vol. 45(1), pages 29-46, June.
    2. Lawrence H. Goulder & John B. Shoven & John Whalley, 1983. "Domestic Tax Policy and the Foreign Sector: The Importance of Alternative Foreign Sector Formulations to Results from a General Equilibrium Tax Analysis Model," NBER Chapters, in: Behavioral Simulation Methods in Tax Policy Analysis, pages 333-368, National Bureau of Economic Research, Inc.
    3. Gasiorek, Michael & Smith, Alasdair & Venables, Anthony J, 1992. "`1992': Trade and Welfare; A General Equilibrium Model," CEPR Discussion Papers 672, C.E.P.R. Discussion Papers.
    4. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
    5. Lawrence H. Goulder & John B. Shoven & John Whalley, 1982. "Domestic Tax Policy and the Foreign Sector: The Importance of Alternative Foreign Sector Formulations to Results from a General Equilibrium," NBER Working Papers 0919, National Bureau of Economic Research, Inc.
    6. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
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    Cited by:

    1. Eduardo Haddad & Weslem Faria & Luis Armando Galvis-Aponte & Lucas Wilfried Hahn-De-Castro, 2016. "Matriz insumo-producto interregional para Colombia, 2012," Documentos de trabajo sobre Economía Regional y Urbana 247, Banco de la Republica de Colombia.

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    More about this item

    Keywords

    Tax exporting; applied CGE modelling;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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