Commodity Taxation and International Trade in Imperfect Markets

Andreas Haufler (), Guttorm Schjelderup () and Frank Staehler ()

No CESifo Working Paper No. 376, CESifo Working Paper Series from CESifo Group Munich

Abstract: This paper studies non-cooperative commodity taxation in a trade model with imperfect competition and trade costs. Nationally optimal tax policy simultaneously tries to correct the domestic distortion from imperfect competition and to shift rents to the home country. Importantly, this trade-off depends qualitatively on the international commodity tax regime in operation. For low levels of trade costs, we show that production-based commodity taxes dominate from a global welfare perspective, but this ranking is reversed in favor of consumption-based taxation when trade costs become sufficiently high.

Keywords: Commodity taxation; imperfect competition; strategic trade policy (search for similar items in EconPapers)
JEL-codes: F12 H20 (search for similar items in EconPapers)
Date: 2000
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Related works:
Working Paper: Commodity Taxation and international Trade in Imperfect Markets (2000)
Working Paper: Commodity Taxation and International Trade in Imperfect Markets (2000)
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