Tax Principles and Tariff-Tax Reforms under International Oligopoly

Kenji Fujiwara ()

No 116, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper, in a two-country duopoly model, compares destination- and origin-based commodity taxes in a context of a unilateral tariff-tax reform that fixes the world price and foreign welfare. We find that the proposed reform reduces domestic welfare, and hence is strictly Pareto-deteriorating under the destination principle while the opposite holds under the origin principle. Moreover, it is shown that this ranking is reversed if exports are taxed. In short, which is preferable between destination and origin taxation depends on the tax principle and which between imports and exports are taxed.

Keywords: tax principles; tariff-tax reform; destination-based consumption tax; origin-based production tax (search for similar items in EconPapers)
JEL-codes: F12 F13 H2 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-03, Revised 2014-03
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/kgdp116.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: Tax Principles and Tariff-Tax Reforms under International Oligopoly (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:116

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