Tax Principles and Tax Harmonization under Imperfect Competition: A Cautionary Example
This paper shows that under imperfect competition the welfare effects of indirect tax harmonization may depend crucially on whether taxes are levied by the destination or the origin principle. In a standard model of imperfect competition, while harmonization always makes at least one country better off, and may be Pareto-improving, when taxes are levied under the destination principle (which currently applies in the European Union), harmonization of origin-based taxes (as recently proposed by the European Commission) is certain to be Pareto-worsening when the preferences in the two countries are identical, and is likely to be so even when they differ.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sajal Lahiri & Pascalis Raimondos, .
"Public Good Provision and the Welfare Effects of Indirect Tax Harmonisation,"
EPRU Working Paper Series
95-13, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Lahiri, Sajal & Raimondos-Moller, Pascalis, 1998. "Public good provision and the welfare effects of indirect tax harmonisation," Journal of Public Economics, Elsevier, vol. 67(2), pages 253-267, February.
- Keen, Michael & Lahiri, Sajal, 1998.
"The comparison between destination and origin principles under imperfect competition,"
Journal of International Economics,
Elsevier, vol. 45(2), pages 323-350, August.
- Keen, Michael & Lahiri, Sajal, 1994. "The Comparison Between Destination and Origin Principles Under Imperfect Competition," Economics Discussion Papers 10023, University of Essex, Department of Economics.
- Michael Keen & Sajal Lahiri, 1994. "The comparison between destination and origin principles under imperfect competition," IFS Working Papers W94/08, Institute for Fiscal Studies.
- Lopez-Garcia, Miguel-Angel, 1998. "On welfare and revenue effects of indirect tax harmonization," Economics Letters, Elsevier, vol. 60(2), pages 185-193, August.
- Keen, Michael, 1989. "Pareto-improving indirect tax harmonisation," European Economic Review, Elsevier, vol. 33(1), pages 1-12, January.
- Lockwood, B., 2000.
"Tax Competition and Tax Co-Ordination Under Destination and Origin Principles: A Synthesis,"
The Warwick Economics Research Paper Series (TWERPS)
567, University of Warwick, Department of Economics.
- Lockwood, Ben, 2001. "Tax competition and tax co-ordination under destination and origin principles: a synthesis," Journal of Public Economics, Elsevier, vol. 81(2), pages 279-319, August.
- Andreas Haufler & Guttorm Schjelderup & Frank Stähler, 2000.
"Commodity Taxation and International Trade in Imperfect Markets,"
CESifo Working Paper Series
376, CESifo Group Munich.
- Andreas Haufler & Guttorm Schjelderup & Frank Staehler, 2000. "Commodity Taxation and international Trade in Imperfect Markets," CoFE Discussion Paper 00-32, Center of Finance and Econometrics, University of Konstanz.
- Haufler, A. & Schjelderup, G. & Stahler, F., 2000. "Commodity Taxation and International Trade in Imperfect Markets," Papers 17/00, Norwegian School of Economics and Business Administration-.
- Keen, Michael & Lahiri, Sajal, 1993. "Domestic tax reform and international oligopoly," Journal of Public Economics, Elsevier, vol. 51(1), pages 55-74, May.
- Ben Lockwood & David Meza & Gareth Myles, 1994. "When are origin and destination regimes equivalent?," International Tax and Public Finance, Springer, vol. 1(1), pages 5-24, February.
- Delipalla, Sophia, 1997. "Commodity tax harmonisation and public goods," Journal of Public Economics, Elsevier, vol. 63(3), pages 447-466, February.
- Keen, Michael, 1987. "Welfare effects of commodity tax harmonisation," Journal of Public Economics, Elsevier, vol. 33(1), pages 107-114, June.
- Jones, Ronald W, 1985. "Income Effects and Paradoxes in the Theory of International Trade," Economic Journal, Royal Economic Society, vol. 95(378), pages 330-44, June.
- Miguel-Angel Lopez-Garcia, 1996. "The origin principle and the welfare gains from indirect tax harmonization," International Tax and Public Finance, Springer, vol. 3(1), pages 83-93, January.
When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_518. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe)
If references are entirely missing, you can add them using this form.