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A Linear Multi-Sector Equilibrium Model with Taxation

Author

Listed:
  • Li, Wu
  • Li, Bangxi

Abstract

This paper presents a linear multi-sector equilibrium model with taxation, which includes two types of consumers (i.e. laborers and capitalists). In the model capitalists exploit laborers by levying taxes. Hence, the issues of the income distribution between laborers and capitalists can be studied in the form of tax issues. This model covers the two types of simple reproduction models as its special cases, that is, the simple reproduction model wherein agents exchange commodities by labor values (i.e. the surplus value model), and the simple reproduction model wherein agents exchange commodities by production prices (i.e. the profit-price model). Hence this is a more general framework for the analyzing of the simple reproduction. After the development of the model, the effects of levying the wage tax, value-added tax and the turnover tax are discussed. And the possible efficiency loss of levying the turnover tax is also illustrated.

Suggested Citation

  • Li, Wu & Li, Bangxi, 2014. "A Linear Multi-Sector Equilibrium Model with Taxation," MPRA Paper 59313, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:59313
    as

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    File URL: https://mpra.ub.uni-muenchen.de/59313/1/MPRA_paper_59313.pdf
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    References listed on IDEAS

    as
    1. Christian Gehrke & Christian Lager, 1995. "Environmental Taxes, Relative Prices And Choice Of Technique In A Linear Model Of Production," Metroeconomica, Wiley Blackwell, vol. 46(2), pages 127-145, June.
    2. Samuelson, Paul, 2012. "Understanding the Marxian Notion of Exploitation: A Summary of the So-CalledTransformation Problem Between Marxian Values and Competitive Prices," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 182-202, August.
    3. Metcalfe, J S & Steedman, Ian, 1971. "Some Effects of Taxation in a Linear Model of Production," The Manchester School of Economic & Social Studies, University of Manchester, vol. 39(3), pages 171-185, September.
    4. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Tax; Linear Model; General Equilibrium; Marxian Economics;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • D3 - Microeconomics - - Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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