Commodity Taxation for Maximum Revenue
- 1 October 1987
- journal article
- Published by SAGE Publications in Public Finance Quarterly
- Vol. 15 (4) , 371-385
- https://doi.org/10.1177/109114218701500401
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.Keywords
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