Tax Incidence with Three Goods and Two Primary Factors: Theory and Applications

Kul Bhatia ()

No 9914, University of Western Ontario, Departmental Research Report Series from University of Western Ontario, Department of Economics

Abstract: A three-good-two-primary-factor (3x2) general equilibrium model, along with parallel numerical illustrations, is developed to analyze the incidence and welfare cost of several taxes. The approach, blending theory and computed examples, enriches some well-known tax models and provides more insights than either the text-book two-by-two treatments or purely numerical models in areas such as environmental taxation and value-added tax (vat). It is ideal for considering factor taxes in intermediate-good industries (e.g., profit- and payroll taxes in mining industries) which are widely used but not much discussed in the literature. Their incidence, generally, turns out to be very different from similar taxes in final-good industries. A stylized application incorporating zero-rating and exemptions, two key features of the vat system in many countries, further illustrates the usefulness of this framework.

Keywords: Intermediate-good taxation; general equilibrium; three-by-two (search for similar items in EconPapers)
JEL-codes: H22 (search for similar items in EconPapers)
Date: 1999
New Economics Papers: this item is included in nep-cdm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ir.lib.uwo.ca/cgi/viewcontent.cgi?article=1374&context=economicsresrpt (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
Journal Article: Tax Incidence with Three Goods and Two Primary Factors: Theory and Applications (1998)
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:uwo:uwowop:9914

Ordering information: This working paper can be ordered from
https://economics.uw ... itting_ordering.html
The price is Paper copy available by mail at a cost of $10.00 Canadian each.

Access Statistics for this paper

More papers in University of Western Ontario, Departmental Research Report Series from University of Western Ontario, Department of Economics Department of Economics, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2.
Bibliographic data for series maintained by ().