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A Theory of Commodity Tax Reform under Revenue Constraint

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  • Tatsuo Hatta

Abstract

Despite the development of the optimal taxation theory , few of the practicing tax economists question the traditional wisdom that making tax rates flat will lead to a more efficient tax system. Practicing tax economists seem to have an intuition that even if the uniform tax structure may not be the most efficient, it may be a close approximation. The present paper survey the literature that provides theoretical under-pinnings for the practitioner's intuition. Also, the paper simplifies the statements and proofs of theorems in literature.
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  • Tatsuo Hatta, 2004. "A Theory of Commodity Tax Reform under Revenue Constraint," The Japanese Economic Review, Japanese Economic Association, vol. 55(1), pages 1-16, March.
    • Handle: RePEc:bla:jecrev:v:55:y:2004:i:1:p:1-16
    DOI: 10.1111/j.1468-5876.2004.t01-1-00272.x
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    1. Gruber, Jon & Saez, Emmanuel, 2002. "The elasticity of taxable income: evidence and implications," Journal of Public Economics, Elsevier, vol. 84(1), pages 1-32, April.
    2. Tatsuo Hatta & Yoshitomo Ogawa, 2003. "A Theory of Optimal Tariffs under a Revenue Constraint," CIRJE F-Series CIRJE-F-202, CIRJE, Faculty of Economics, University of Tokyo.
    3. Sandmo, Agnar, 1976. "Optimal taxation : An introduction to the literature," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 37-54.
    4. Hatta, Tatsuo & Haltiwanger, John, 1986. "Tax Reform and Strong Substitutes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 303-315, June.
    5. Ray, Ranjan, 1986. "Sensitivity of `optimal' commodity tax rates to alternative demand functional forms : An econometric case study of India," Journal of Public Economics, Elsevier, vol. 31(2), pages 253-268, November.
    6. W. J. Corlett & D. C. Hague, 1953. "Complementarity and the Excess Burden of Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 21(1), pages 21-30.
    7. Sah, Raaj Kumar, 1983. "How much redistribution is possible through commodity taxes?," Journal of Public Economics, Elsevier, vol. 20(1), pages 89-101, February.
    8. Seki Asano & Takashi Fukushima, 2006. "Some Empirical Evidence On Demand System* And Optimal Commodity Taxation," The Japanese Economic Review, Japanese Economic Association, vol. 57(1), pages 50-68, March.
    9. Hatta, Tatsuo, 1986. "Welfare effects of changing commodity tax rates toward uniformity," Journal of Public Economics, Elsevier, vol. 29(1), pages 99-112, February.
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    Cited by:

    1. Yoshitomo Ogawa, 2007. "The optimal commodity tax structure in a four-good model," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(6), pages 657-671, December.
    2. Horioka, Charles Yuji & Sekita, Shizuka, 2007. "Tax reform in Japan: The case of personal taxes," Japan and the World Economy, Elsevier, vol. 19(3), pages 380-392, August.
    3. Knud Jørgen Munk & Bo Sandemann Rasmussen, 2005. "On the Determinants of Optimal Border Taxes for a Small Open Economy," Economics Working Papers 2005-22, Department of Economics and Business Economics, Aarhus University.
    4. AHMED, Eatzat & JALIL, Abdul & IDREES, Muhammad, 2013. "Almost Ideal Demand System And Uniform Taxation In Pakistan: Econometric Evidences For Consumer Goods In Pakistan, 1984-2008," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(2), pages 207-216.
    5. Charles Yuji Horioka & Shizuka Sekita, 2004. "An Assessment of Consumption and Income Taxes in Japan," ISER Discussion Paper 0624, Institute of Social and Economic Research, Osaka University.

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