Asymmetric commodity tax competition — comment on de Crombrugghe and Tulkens
- 作者：Haufler ; Andreas
- 关键词：Commodity tax competition ; Fiscal externalities ; H23 ; H73
- 刊名：Journal of Public Economics
- 出版年：1998
- 期刊代码：51_00472727
- 类别：eco
- 出版时间：January 1, 1998
- 卷：67
- 期：1
- 页码：135-144
- 文件大小：469 K
摘要
A widely noticed result by de Crombrugghe and Tulkens (Journal of Public Economics 41 (1990) 335–350) states that asymmetric commodity tax competition always leads to tax rates being too low in both countries, even though there are counteracting private and public consumption effects for the high-tax region. This note argues that the result depends crucially on the assumption that welfare in the high-tax region is concave in the tax rate of the low-tax country and shows that this assumption cannot generally be met in the underlying Mintz and Tulkens (Journal of Public Economics 29 (1986) 133–172) model. It is also shown that a tax increase in the low-tax country will hurt the high-tax region when the marginal transaction cost schedule is sufficiently elastic with respect to the level of cross-border shopping.