EconPapers    
Economics at your fingertips  
 

Scale Economies in Cross-Border Shopping and Commodity Taxation

Kimberley Scharf

International Tax and Public Finance, 1999, vol. 6, issue 1, 89-99

Abstract: A simple inventory theoretic model of cross-border shopping with transaction and storage costs is developed. Consumers incur fixed transaction and transportation costs to access the foreign market in which a perfect substitute of the domestic good is available. We show that the size of the optimal tax is inversely related to the size of domestic transactions. This result provides a simple example of a more general principle, that is, when there are increasing returns to scale in tax avoidance with respect to the quantities involved, then smaller transactions should be taxed more heavily than larger transactions. Copyright Kluwer Academic Publishers 1999

Keywords: Tax Avoidance; Optimal Commodity Taxation; Cross-Border Shopping (search for similar items in EconPapers)
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1023/A:1008652004940 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:6:y:1999:i:1:p:89-99

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-11-22
Handle: RePEc:kap:itaxpf:v:6:y:1999:i:1:p:89-99