Optimal grouping of commodities for indirect taxation

Pascal Belan (), Stephane Gauthier and Guy Laroque

Journal of Public Economics, 2008, vol. 92, issue 7, 1738-1750

Abstract: Indirect taxes contribute to a sizeable part of government revenues around the world. Typically there are few different tax rates, and the goods are partitioned into classes associated with each rate. The present paper studies how to group the goods in these few classes. We take as given the number of tax rates and study the optimal aggregation (or classification) of commodities of the fiscal authority in a second best setup. The results are illustrated on data from the United Kingdom.

Date: 2008
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Related works:
Working Paper: Optimal grouping of commodities for indirect taxation (2008)
Working Paper: The Optimal Grouping of Commodities for Indirect Taxation (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:92:y:2008:i:7:p:1738-1750

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