Unit versus ad valorem taxes : the private ownership of monopoly in general equilibrium
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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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  and Quinzii  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)|
|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|
|Number of Pages:||41|
|Institution:||University of Warwick|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
Avriel, M., Diewert, W., Schaible, S., and Zang, I. (1988). Generalized concavity. New York: Plenum Press.
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