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Tax Principles and Tariff-Tax Reforms

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  • Kenji Fujiwara

Abstract

This paper develops a two-country general-equilibrium model to examine the welfare effect of tariff-tax reforms that fix the world price. We show that this reform improves welfare if a production tax is adjusted, but that it reduces welfare if a consumption tax is used. Moreover, this result is reversed in the export tax case. In short, the proposed policy reform improves welfare depending on whether imports and exports are taxed, as well as on tax principles.

Suggested Citation

  • Kenji Fujiwara, 2015. "Tax Principles and Tariff-Tax Reforms," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 71(3), pages 360-370, September.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(201509)71:3_360:tpatr_2.0.tx_2-m
    DOI: 10.1628/001522108X14331675558843
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    More about this item

    Keywords

    destination principle; origin principle; tariff---tax reform;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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