Taxing sales to tourists over time

Leon Taylor ()

Public Economics from EconWPA

Abstract: An optimal control model shows how a jurisdiction can tax tourists in a
way that maximizes its revenues net of its costs in serving tourists: By
relating its tax rate to its popularity with tourists. When its
popularity waxes, it should raise the tax rate; when its popularity
wanes, it should lower the tax rate. Extensions consider the effects on
the tax of the discount rate, tourist prices, tourist congestion, and of
the rise in the relative cost of services that is due to rising
productivity in manufacturing. Computer simulations generate a concave
tax path for a small city launching a tourism program.

Keywords: tourism; taxes (search for similar items in EconPapers)
JEL-codes: D6 D7 H (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 1998-10-15
Note: Type of Document - LaTex; prepared on IBM PC ; to print on HP;
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:9810003

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