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Over the borderline: How the characteristics of lines shape optimal tax policy

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  • Agrawal, David R.

Abstract

Using the example of geographic borders, I demonstrate how the permeability of lines in the tax system and the ability of the tax authority to reduce tax evasion across lines are essential determinants of the optimal commodity tax policy.

Suggested Citation

  • Agrawal, David R., 2013. "Over the borderline: How the characteristics of lines shape optimal tax policy," Economics Letters, Elsevier, vol. 119(2), pages 113-116.
    • Handle: RePEc:eee:ecolet:v:119:y:2013:i:2:p:113-116
    DOI: 10.1016/j.econlet.2013.02.008
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    References listed on IDEAS

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    1. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    2. David Agrawal, 2012. "Games within borders: are geographically differentiated taxes optimal?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(4), pages 574-597, August.
    3. Søren Bo Nielsen, 2001. "A Simple Model of Commodity Taxation and Cross‐border Shopping," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 599-623, December.
    4. Nielsen, Soren Bo, 2002. "Cross-border shopping from small to large countries," Economics Letters, Elsevier, vol. 77(3), pages 309-313, November.
    5. Kanbur, Ravi & Keen, Michael, 1993. "Jeux Sans Frontieres: Tax Competition and Tax Coordination When Countries Differ in Size," American Economic Review, American Economic Association, vol. 83(4), pages 877-892, September.
    6. Andreas Haufler, 1996. "Tax coordination with different preferences for public goods: Conflict or harmony of interest?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(1), pages 5-28, January.
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    Cited by:

    1. Agrawal, David R., 2014. "LOST in America: Evidence on local sales taxes from national panel data," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 147-163.

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    More about this item

    Keywords

    Commodity taxation; Optimal tax systems; Lines; Borders;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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