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Commodity Taxation for Maximum Revenue

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  • John Kay
  • Michael Keen

Abstract

When product quality and variety can be varied, the yield from a commodity tax is likely to depend not only on the overall rate but also on the form of the tax. This article compares specific and ad valorem taxes from a perspective of revenue maximization. The analysis shows that both kinds of tax are likely to distort nonprice behavior, but suggests that revenue considerations will commonly point to predominantly specific taxation.

Suggested Citation

  • John Kay & Michael Keen, 1987. "Commodity Taxation for Maximum Revenue," Public Finance Review, , vol. 15(4), pages 371-385, October.
    • Handle: RePEc:sae:pubfin:v:15:y:1987:i:4:p:371-385
    DOI: 10.1177/109114218701500401
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    References listed on IDEAS

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    Cited by:

    1. George Obeng, 2018. "Value Added Tax and Vat Flat Rate Scheme in Ghana, Any Cascading Implications," Asian Development Policy Review, Asian Economic and Social Society, vol. 6(4), pages 213-225, December.
    2. John Kay & Michael Keen, 1991. "Product Quality Under Specific and Ad Valorem Taxation," Public Finance Review, , vol. 19(2), pages 238-247, April.
    3. Cecil E. Bohanon & T. Norman Van Cott, 1991. "Product Quality and Taxation: a Reconciliation," Public Finance Review, , vol. 19(2), pages 233-237, April.
    4. Hines, James Jr. & Hlinko, John C. & Lubke, Theodore J. F., 1995. "From each according to his surplus: Equi-proportionate sharing of commodity tax burdens," Journal of Public Economics, Elsevier, vol. 58(3), pages 417-428, November.
    5. Roy Bahl & Richard Bird & Mary Beth Walker, 2003. "The Uneasy Case Against Discriminatory Excise Taxation: Soft Drink Taxes in Ireland," Public Finance Review, , vol. 31(5), pages 510-533, September.
    6. Marko Primorac & Silvija Vlah Jeric, 2017. "The Structure of Cigarette Excises in the EU: From Myths to Reality," CESifo Working Paper Series 6386, CESifo.

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