tax competition and tax co ordination under destination and origin principles a synthesis this paper proposes a general framework for analysing commodity tax competition under destination and origin principles based on three possible tax spillovers the consumer price spillover the producer price terms of trade spillover and rent spillovers a model is presented which can be extended to accommodate all three spillovers using this model many of the results in the existing literature can be derived compared and extended

tax principles and tax harmonization under imperfect competition a cautionary example this paper shows that under imperfect competition the welfare effects of indirect tax harmonization may depend crucially on whether taxes are levied by the destination or the origin principle in a standard model of imperfect competition while harmonization always makes at least one country better off and may be pareto improving when taxes are levied under the destination principle which currently applies in the european union harmonization of origin based taxes as recently proposed by the european commission is certain to be pareto worsening when the preferences in the two countries are identical and is likely to be so even when they differ

value added taxation in the ec after 1992 abstract this paper examines the quantitative effects of the transitional system of value added taxation for intra ec trade between 1993 and 1997 as recently adopted by the ecofin council first the administration of the current destination principle and the interim solution are described a short representation of the empirical general equilibrium model featuring seven ec regions and 14 production sectors follows finally the effects of a switch to the transitional system are evaluated by using numerical simulations the adopted provisions with regard to cross frontier sales to final consumers open tax arbitrage possibilities which favour low tax countries at the cost of their ec partners when decomposing welfare effects international tax revenue shifts prove to dominate while substitution effects have relatively little influence on economic welfare

computing economies of vertical integration economies of scope and economies of scale using partial frontier nonparametric methods abstract so far in the nonparametric literature only full frontier nonparametric methods have been applied to search for economies of scope and scale particularly the data envelopment analysis method dea however these methods present some drawbacks that might lead to biased results this paper proposes a methodology based on more robust partial frontier nonparametric methods to look for scope and scale economies through this methodology it is possible to assess the robustness of these economies and in particular to assess the influence that extreme data or outliers might have on them the influence of the imposition of convexity on the production set of firms was also investigated this methodology was applied to the water utilities that operated in portugal between 2002 and 2008 there is evidence of economies of vertical integration and economies of scale in drinking water supply utilities and in water and wastewater utilities operating mainly in the retail segment economies of scale were found in water and wastewater utilities operating exclusively in the wholesale and in some of these utilities diseconomies of scope were also found the proposed methodology also allowed us to conclude that the existence of some smaller utilities makes the minimum optimal scales go down

on the desirability of tax coordination when countries compete in taxes and infrastructure in our paper we demonstrate that when countries compete in taxes and infrastructure coordination through a uniform tax rate or a minimum rate does not necessarily create the welfare effects observed under pure tax competition the divergence is even worse when the competing jurisdictions differ in institutional quality if tax revenues are used to gauge the desirability of coordination our model demonstrates that imposing a uniform tax rate is pareto inferior to the non cooperative equilibrium when countries compete in taxes and infrastructure this result is completely reversed under pure tax competition if the countries are sufficiently similar in size if a minimum tax rate is set within the range of those resulting from the non cooperative equilibrium the low tax country will never be better off finally the paper demonstrates that the potential social welfare gains from tax harmonization crucially depend on the degree of heterogeneity among the competing countries

domestic tax reform and international oligopoly abstract this paper examines the strategic use of domestic tax instruments and the welfare effects of multilateral domestic tax reform in a model of international cournot oligopoly the welfare effects of commodity tax harmonization appropriately defined are precisely as in the competitive case it is always potentially pareto improving and starting from the nash equilibrium in tax rates is pareto improving without any need for compensation a mutual reduction of production subsidies benefits the efficient low marginal cost country and harms the inefficient despite the pre existing monopoly distortion the effect on global efficiency is ambiguous

harmonization of commodity taxes destination origin and restricted origin principles abstract the three tax principles are compared using a multiproduct custom union model it is shown that if member countries use the destination or origin principles no distortion or redistribution of income occurs even if their tax rates differ however under the restricted origin principle different tax rates result in distortion and income redistribution equal tax rates still result in a redistribution of real income an exact measurement of this redistribution is derived given these results it seems possible to conclude that the origin principle is superior to the other tax principles

efficiency decomposition and aggregation in network data envelopment analysis abstract network data envelopment analysis dea is extended from conventional dea to explore the internal structure of network production systems so that the efficiencies are measured more appropriately there are two approaches for discussing the relationships between the system and division efficiencies efficiency decomposition and efficiency aggregation this paper develops a relational model from the viewpoint of efficiency decomposition to derive the relationships between the system and division efficiencies for network systems the system efficiency can be decomposed into a weighted average of the division efficiencies adjusted by a factor and the efficiency of the system is less than the weighted average of those of the divisions the major league baseball example that has been discussed in the literature is used to illustrate the idea presented in this paper the results of the efficiency decomposition model are compared to those obtained from an efficiency aggregation model that defines the aggregate efficiency of the divisions to be the system efficiency this system efficiency is found to be very close to a measure contained in the proposed model the proposed model can thus be used for both efficiency decomposition and aggregation

welfare effects of changing commodity tax rates toward uniformity abstract this paper presents a theory of tax reform that is applicable to a many good economy where i the initial tax structure is arbitrarily given ii no lump sum tax exists and iii the initial tax revenue must be maintained after the reform sufficient conditions are established under which tax changes definitely result in increases in welfare they indicate that in a wide class of situations the uniform tax structure can be a useful intermediate target on the way to optimum

public good provision and the welfare effects of indirect tax harmonisation the paper considers the welfare effect of the harmonisation of indirect taxes in two open economies the revenue from taxation is used for the production of a non tradeable public good the welfare levels are affected via two channels i changes in the levels of public good provision and ii changes in deadweight loss associated with the taxes we develop a number of rules of harmonisation and derive conditions under which they lead to potential pareto improvement

on pareto improving commodity tax changes under fiscal competition this paper shows that when a noncooperative fiscal equilibrium of the mintz tulkens 1986 model of tax competition is inefficient pareto improving changes are positive for the taxes of both regions under concavity of the regions welfare functions it also identifies a class of such equilibria that are always efficient

the welfare consequences of pollution tax harmonization a key and often controversial issue in environmental negotiations is the appropriate extent of harmonization of environmental policies this paper within a general equilibrium model of international trade with endogenous pollution discharges identifies instances in which pollution tax harmonization can deliver potential pareto improvements

commodity tax competition between member states of a federation equilibrium and efficiency we first describe regional market equilibria whereupon consumers of each region allocate their purchases of private goods between domestic and nondomestic ones according to the structure of relative prices taxes and transportation costs next regional optimal tax levels and public good quantities are derived the tax of the other region being held constant fiscal competition arises from the ability of one region in choosing its tax to alter the tax base of the other

paternalism and tax competition when consumers make mistakes the government may wish to use paternalistic taxation as a corrective measure we analyse the extent to which tax competition undermines the feasibility of paternalistic taxation we show that the paternalistic component of a tax on a harmful good is reduced when there is cross border shopping but it does not disappear altogether in a model with tax competition between two countries only one of which has a paternalistic objective we show that a minimum tax rate requirement can be pareto improving despite the divergence in policy objectives tax harmonization however reduces welfare in the non paternalistic country

interstate commodity tax differentials and the distribution of residents abstract this paper considers the manner in which an unequal distribution of consumers affects the commodity tax policies of neighboring jurisdictions the paper uses a spatial model in which the residents of two states are distributed non uniformly and employs a variety of assumptions about the behavior of governments and firms throughout the paper shows that at a nash equilibrium in tax levels the sparsely populated state imposes a lower tax than does its densely populated neighbor the paper also demonstrates how equilibrium state taxes differ depending on whether firms employ marginal cost or profit maximizing pricing

designing tax policy in federalist economies an overview abstract the emerging economic federations of the european union russia and south africa along with the established federations in australia canada and the united states confront the task of designing the institutions for federal fiscal policy this paper reviews the literature on the design of tax policy in federalist economies we conclude that taxation by lower level governments can lead to significant economic inefficiencies and inequities the usual assignment view of federalis recommends central government policies for example resident based taxation or grants in aid to correct these failures these recommendations assume that the central government will act as a benevolent social planner the political economy view of federalism suggests that this assumption is in error and that additional federalist institutions must be considered alternative legislative structures and constitutional rules are considered

the origin principle tax harmonization and public goods abstract this paper takes up two tasks firstly it shows that the conclusion drawn in lucas 2001 lucas v 2001 tax harmonisation and the origin principle economic letters 71 111 115 regarding potential pareto improvement in small open economies needs to be amended secondly in large open economies it verifies that some reasonable conjectures concerning the welfare effects of a particular tax harmonizing reform hold under the origin based tax system when public goods are present

implementing tax coordination abstract this paper investigates whether tax competition can survive under tax coordination when information is private or nonverifiable we focus on a two jurisdiction model where capital can move across borders and where jurisdictions have different public good requirements but are otherwise identical in this setting coordination may call for a second best allocation supported by differentiated tax rates if however coordination must be achieved via a set of common rules that condition tax rates on jurisdictions choices the second best allocation may not be implementable we show that incentive compatibility requirements will generally affect not only the choice of coordinated rates in states where jurisdictions are different but also the choice of harmonized rates in states where jurisdictions have identical preferences for public consumption

tax harmonisation and the origin principle the purpose of this paper is to discuss whether a tax harmonisation based on the origin principle can be actual pareto improvement api and potential pareto improving ppi in the presence of public good provision we show that there are situations in which some tax harmonisation leads to api and ppi in such cases tax harmonisation converges towards the optimal tax and leads to the api for instance in a two country framework if the foreign country has an initial level of distortion higher than the home country around the optimal tax its initial tax rate must be lower higher than home country in order to obtain a ppi c 2001 elsevier science b v all rights reserved

pareto improving indirect tax harmonisation abstract indirect tax harmonisation is central to the european commission s proposals for completion of the internal market by 1993 this paper is concerned with the possibility that such tax coordination might be justified on efficiency grounds as a response to tax induced trade distortions necessary and sufficient conditions characterising welfare improving multilateral tax reforms are given and specific forms of harmonisation are shown to be strictly pareto improving without any need for compensation if the initial situation is one in which protectionist tendencies in domestic taxation are sufficiently pronounced

welfare effects of commodity tax harmonisation abstract the european commission is currently seeking a rapid accelaration of the process of commodity tax harmonisation within the european community substantial changes in domestic tax structures are envisaged yet the welfare theoretic basis of the policy has remained obscure this note goes some way towards suggesting a welfare argument for harmonisation as a collective response to tax induced trade distortions intentional or otherwise it is shown that a programme of multilateral domestic tax reform involving convergence towards an appropriately weighted average of pre existing tax structures a kind of harmonisation is potentially pareto improving

tacit collusion and international commodity taxation the paper employs a model of dynamic price competition to study how international commodity taxation affects the stability of collusive agreements when producers in an international duopoly agree not to export into each other s home market we consider both the choice of international tax principle and the harmonization of tax rates and differentiate between a setting where production costs differ between countries and a setting where exogenous tax rate differentials are the only asymmetry the conclusions derived from this model differ strongly from those obtained under the assumption of competitive product markets

commodity tax harmonisation and public goods this paper examines the welfare effects of commodity tax harmonisation incorporating in the analysis the important feature that tax revenue is not returned to the consumer as a lump sum but it is used to finance a local public good only under certain conditions commodity tax harmonisation is potentially welfare improving introducing both transfers between consumers and transfers between governments it is shown inter alia that the analysis is sensitive to the kind of transfers assumed suggesting that arguments that rely on international transfers should be handled with care