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Unit versus ad valorem taxes : the private ownership of monopoly in general equilibrium
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Murty, Sushama and Blackorby, Charles (2007) Unit versus ad valorem taxes : the private ownership of monopoly in general equilibrium. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic esearch papers (No.797).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
In an earlier paper [Blackorby and Murty; 2007] we showed that if a monopoly sector is imbedded in a general equilibrium framework and profits are taxed at one hundred percent, then unit (specific) taxation and ad valorem taxation are welfare-wise equivalent. In this paper, we consider private ownership of the monopoly sector. Given technical difficulties in making a direct general equilibrium comparison of unit and ad valorem taxation, we
adopt a technique due to Guesnerie [1980] and Quinzii [1992] in a somewhat different context of increasing returns and non-convex economies to show that neither ad valorem taxation nor unit taxation Pareto dominates the other; although, generally, the two are not welfare-wise equivalent.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HB Economic Theory | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Tariff, Taxes, Monopolies | ||||
Series Name: | Warwick economic esearch papers | ||||
Publisher: | University of Warwick, Department of Economics | ||||
Place of Publication: | Coventry | ||||
Official Date: | 2007 | ||||
Dates: |
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Number: | No.797 | ||||
Number of Pages: | 41 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) |
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