Piecemeal Reform of Domestic Indirect Taxes toward Uniformity in the Presence of Pollution: with and without a Revenue Constraint

Michael Michael, Sajal Lahiri and Panos Hatzipanayotou

Journal of Public Economic Theory, 2015, vol. 17, issue 2, 174-195

Abstract: The literature on indirect tax reforms in pollution-ridden economies is quite limited. This paper, using a general equilibrium model of a perfectly competitive small open economy with both production- and consumption-generated pollution, considers the welfare implications of tax reforms that take the structure of consumption and production taxes toward uniformity. Specifically, both in the presence and absence of a binding government revenue constraint, we derive sufficient conditions for welfare improvement in the case where we implement (i) reforms in either production or consumption taxes, and (ii) reforms in both consumption and production taxes.

Date: 2015
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Working Paper: Piecemeal Reform of Domestic Indirect Taxes toward Uniformity in the Presence of Pollution: with and without a Revenue Constraint (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:17:y:2015:i:2:p:174-195

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