Tax Principles and Coordination of Trade and Domestic Policies under Imperfect Competition

Kenji Fujiwara ()

No 112, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: We construct an exporting monopoly model to compare destination- and origin-based commodity taxes in a context of a trade and domestic tax reform. We show that an export tax reduction and a change in destination (resp. origin) tax that fix the world price is strictly Pareto-improving (resp. deteriorating), which holds whether markets are integrated or segmented. This result may provide a new rationale for preferring the destination-based consumption tax to the origin-based production tax that has been discussed in the literature of tax harmonization and tax competition.

Keywords: export tax; consumption tax; production tax; monopoly; strict Pareto improvement/deterioration (search for similar items in EconPapers)
JEL-codes: F12 F13 H2 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2013-11, Revised 2013-11
New Economics Papers: this item is included in nep-acc, nep-int, nep-pbe and nep-pub
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http://192.218.163.163/RePEc/pdf/kgdp112.pdf First version, 2013 (application/pdf)

Related works:
Journal Article: Tax Principles and Coordination of Trade and Domestic Policies Under Imperfect Competition (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:112

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