Commodity Tax Reforms In A Many Consumers Economy: A Viable Decision-Making Procedure

Fabrizio Bulckaen and Marco Stampini

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: This paper deals with efficiency and distributional effects of commodity tax reforms in economies with heterogeneous individuals. It contributes to the literature in three ways. First, a decision rule based on revenue potentialities - the ratio between marginal revenue and the tax base - is originally developed with reference to a many consumers economy. The relevance lies in the fact that these indicators do not depend on measures of utility. Second, the connection with former literature is analyzed. Third, a comprehensive and progressive decision-making procedure relying on revenue potentialities is defined. Overall, all that policy makers need to know - in order to look for improvements in efficiency and/or distribution through revenue-neutral commodity tax reforms - is the revenue potentiality of each tax and the share of expenditure by poor families. An example with reference to Italian data is provided.

Keywords: tax reforms; efficiency; distribution; policy analysis (search for similar items in EconPapers)
JEL-codes: D30 H20 (search for similar items in EconPapers)
Date: 2004-01-01
Note: ISSN 2039-1854
References: Add references at CitEc
Citations: View citations in EconPapers (12)

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Working Paper: Commodity Tax Reforms In A Many Consumers Economy: A Viable Decision-Making Procedure (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2004/44

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