Optimal grouping of commodities for indirect taxation

Pascal Belan (), Stephane Gauthier and Guy Laroque

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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.

Keywords: Indirect tax; Ramsey; Aggregation (search for similar items in EconPapers)
Date: 2008-07
Note: View the original document on HAL open archive server: https://hal.science/hal-00731151v1
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Citations: View citations in EconPapers (22)

Published in Journal of Public Economics, 2008, 92 (7), pp.1738-1750. ⟨10.1016/j.jpubeco.2008.01.010⟩

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Related works:
Journal Article: 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:hal:journl:hal-00731151

DOI: 10.1016/j.jpubeco.2008.01.010

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