Revenue-Neutral Tax Policies under Price Uncertainty

Garth J. Holloway

American Journal of Agricultural Economics, 1990, vol. 72, issue 1, 157-159

Abstract: The firm's response to revenue-neutral taxation is investigated under price uncertainty. Revenue-neutral policies adjust simultaneously the marginal tax rate and the level of exemptions while keeping expected tax receipts constant. Nonincreasing absolute risk aversion is sufficient to sign the firm's response: a reduction in the marginal rate causes the firm to contract output. Implications are established for the equilibrium level of treasury receipts.

Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:72:y:1990:i:1:p:157-159.

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