A Welfare Comparison of Ad Valorem and Unit Tax Regimes
Journal
International Tax and Public Finance
ISSN
0927-5940
Type
journal article
Date Issued
2016
Author(s)
Abstract (De)
This paper strives to merge two strands of the literature. The first group of papers compares ad valorem and unit taxes in a tax competition framework in terms of welfare. The second group of papers regards capital income taxes as a conjunction of taxes on pure profits and taxes on capital income. We find that, given decreasing returns to scale, there always exists a level of the share of deductible capital costs strictly smaller than one, such that for all values larger than this threshold, an ad valorem tax regime unambiguously Pareto-dominates a unit tax regime.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
None
Refereed
Yes
Publisher
Springer
Volume
23
Number
1
Start page
140
End page
157
Subject(s)
Eprints ID
259462