Telecommunications Tax Design: The Role of a Preexisting Labor Tax Distortion

Fitzroy A. Lee

National Tax Journal, 2002, vol. 55, issue 1, 41-56

Abstract: The paper assesses the effects of a preexisting labor tax on the relative efficiency of a capital tax and a sales tax on the telecommunications sector. Public finance theory predicts that the efficiency costs of a sales tax increase when there is a preexisting labor tax, but the theory is ambiguous as to the effect of the preexisting labor tax on the efficiency costs of a capital tax. Using a numerical general equilibrium model I show that the efficiency costs of both taxes are of the same orders of magnitude in a first-best setting. But when there is a preexisting labor tax, the capital tax is more efficient.

Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.17310/ntj.2002.1.03 (application/pdf)
https://doi.org/10.17310/ntj.2002.1.03 (text/html)
Access is restricted to subscribers and members of the National Tax Association.

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:ntj:journl:v:55:y:2002:i:1:p:41-56

Access Statistics for this article

National Tax Journal is currently edited by Stacy Dickert-Conlin and William M. Gentry

More articles in National Tax Journal from National Tax Association, National Tax Journal Contact information at EDIRC.
Bibliographic data for series maintained by The University of Chicago Press ().