IDEAS home Printed from https://ideas.repec.org/p/zbw/kondp2/295.html
   My bibliography  Save this paper

Asymmetric commodity tax competition: Are tax rates always too low?

Author

Listed:
  • Haufler, Andreas

Abstract

A widely noticed result by de Crombrugghe and Tulkens (1990) states that asymmetric commodity tax competition always leads to tax rates being too low in both countries, even though there are counteracting tax base and terms of trade effects. This note argues that the result depends crucially on the assumption that welfare in the high-tax region is concave in the tax rate of the low-tax country and shows that this assumption cannot generally be met in the underlying Mintz and Tulkens (1986) model. It is also shown that a tax increase in the low-tax country will hurt the high-tax region when the marginal transaction cost schedule is sufficiently elastic with respect to the level of cross-border shopping.

Suggested Citation

  • Haufler, Andreas, 1996. "Asymmetric commodity tax competition: Are tax rates always too low?," Discussion Papers, Series II 295, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    • Handle: RePEc:zbw:kondp2:295
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/101748/1/726322210.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    commodity tax competition; fiscal externalities;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:kondp2:295. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwkonde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.