Multi-stage taxation by subnational governments: welfare effects
- Autores
- Cont, Walter; Fernández Felices, Diego
- Año de publicación
- 2017
- Idioma
- inglés
- Tipo de recurso
- documento de conferencia
- Estado
- versión publicada
- Descripción
- This paper analyzes multi-stage taxation by provinces in a federal country, using a two- good, two-province, two-stage successive differentiated-product symmetric oligopoly model, where each producer is located in a province and sells its product through exclusive retailers located in both provinces. Retailers compete for consumers a la Bertrand with differentiated products. The producer-retailer setup allows provincial governments to raise taxes on both upstream and downstream links of the value chain. We solve a simultaneous and non-cooperative tax competition problem, where (symmet- ric) provinces choose tax rates to maximize welfare subject to a revenue constraint. We find that provinces set tax rates to either raise revenue at only one segment of the value chain or use a combination of upstream and downstream taxation. This choice is determined by the revenue requirement, the size of the market and the degree of downstream competition. We characterize and discuss each possible case. Comparing the results of this model with the Leviathan case (analyzed in a previous paper by the authors) where governments behave as revenue maximizers, we find that there is a threshold on revenue requirement such that welfarist governments tend to behave qual- itatively similar to Leviathan governments when revenue need exceed the threshold: they both choose a combination of taxes if products have some degree of heterogeneity, whereas they rely on downstream taxation when products are homogeneous. This way we provide a rationale for raising taxes on successive taxation even when governments internalize the effect of successive taxation on welfare.
Facultad de Ciencias Económicas - Materia
-
Ciencias Económicas
Local indirect taxation
Multistage taxes
Tax competition
Welfare taxation - Nivel de accesibilidad
- acceso abierto
- Condiciones de uso
- http://creativecommons.org/licenses/by-nc-sa/4.0/
- Repositorio
- Institución
- Universidad Nacional de La Plata
- OAI Identificador
- oai:sedici.unlp.edu.ar:10915/123323
Ver los metadatos del registro completo
id |
SEDICI_54e4dd32b4ee4f7679ef92a5de412f0e |
---|---|
oai_identifier_str |
oai:sedici.unlp.edu.ar:10915/123323 |
network_acronym_str |
SEDICI |
repository_id_str |
1329 |
network_name_str |
SEDICI (UNLP) |
spelling |
Multi-stage taxation by subnational governments: welfare effectsCont, WalterFernández Felices, DiegoCiencias EconómicasLocal indirect taxationMultistage taxesTax competitionWelfare taxationThis paper analyzes multi-stage taxation by provinces in a federal country, using a two- good, two-province, two-stage successive differentiated-product symmetric oligopoly model, where each producer is located in a province and sells its product through exclusive retailers located in both provinces. Retailers compete for consumers a la Bertrand with differentiated products. The producer-retailer setup allows provincial governments to raise taxes on both upstream and downstream links of the value chain. We solve a simultaneous and non-cooperative tax competition problem, where (symmet- ric) provinces choose tax rates to maximize welfare subject to a revenue constraint. We find that provinces set tax rates to either raise revenue at only one segment of the value chain or use a combination of upstream and downstream taxation. This choice is determined by the revenue requirement, the size of the market and the degree of downstream competition. We characterize and discuss each possible case. Comparing the results of this model with the Leviathan case (analyzed in a previous paper by the authors) where governments behave as revenue maximizers, we find that there is a threshold on revenue requirement such that welfarist governments tend to behave qual- itatively similar to Leviathan governments when revenue need exceed the threshold: they both choose a combination of taxes if products have some degree of heterogeneity, whereas they rely on downstream taxation when products are homogeneous. This way we provide a rationale for raising taxes on successive taxation even when governments internalize the effect of successive taxation on welfare.Facultad de Ciencias Económicas2017-12info:eu-repo/semantics/conferenceObjectinfo:eu-repo/semantics/publishedVersionObjeto de conferenciahttp://purl.org/coar/resource_type/c_5794info:ar-repo/semantics/documentoDeConferenciaapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/123323enginfo:eu-repo/semantics/altIdentifier/isbn/978-987-28590-5-3info:eu-repo/semantics/altIdentifier/url/https://aaep.org.ar/anales/works/works2017/cont_fernandez.pdfinfo:eu-repo/semantics/altIdentifier/issn/1852-0022info:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by-nc-sa/4.0/Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-09-29T11:29:34Zoai:sedici.unlp.edu.ar:10915/123323Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-09-29 11:29:34.795SEDICI (UNLP) - Universidad Nacional de La Platafalse |
dc.title.none.fl_str_mv |
Multi-stage taxation by subnational governments: welfare effects |
title |
Multi-stage taxation by subnational governments: welfare effects |
spellingShingle |
Multi-stage taxation by subnational governments: welfare effects Cont, Walter Ciencias Económicas Local indirect taxation Multistage taxes Tax competition Welfare taxation |
title_short |
Multi-stage taxation by subnational governments: welfare effects |
title_full |
Multi-stage taxation by subnational governments: welfare effects |
title_fullStr |
Multi-stage taxation by subnational governments: welfare effects |
title_full_unstemmed |
Multi-stage taxation by subnational governments: welfare effects |
title_sort |
Multi-stage taxation by subnational governments: welfare effects |
dc.creator.none.fl_str_mv |
Cont, Walter Fernández Felices, Diego |
author |
Cont, Walter |
author_facet |
Cont, Walter Fernández Felices, Diego |
author_role |
author |
author2 |
Fernández Felices, Diego |
author2_role |
author |
dc.subject.none.fl_str_mv |
Ciencias Económicas Local indirect taxation Multistage taxes Tax competition Welfare taxation |
topic |
Ciencias Económicas Local indirect taxation Multistage taxes Tax competition Welfare taxation |
dc.description.none.fl_txt_mv |
This paper analyzes multi-stage taxation by provinces in a federal country, using a two- good, two-province, two-stage successive differentiated-product symmetric oligopoly model, where each producer is located in a province and sells its product through exclusive retailers located in both provinces. Retailers compete for consumers a la Bertrand with differentiated products. The producer-retailer setup allows provincial governments to raise taxes on both upstream and downstream links of the value chain. We solve a simultaneous and non-cooperative tax competition problem, where (symmet- ric) provinces choose tax rates to maximize welfare subject to a revenue constraint. We find that provinces set tax rates to either raise revenue at only one segment of the value chain or use a combination of upstream and downstream taxation. This choice is determined by the revenue requirement, the size of the market and the degree of downstream competition. We characterize and discuss each possible case. Comparing the results of this model with the Leviathan case (analyzed in a previous paper by the authors) where governments behave as revenue maximizers, we find that there is a threshold on revenue requirement such that welfarist governments tend to behave qual- itatively similar to Leviathan governments when revenue need exceed the threshold: they both choose a combination of taxes if products have some degree of heterogeneity, whereas they rely on downstream taxation when products are homogeneous. This way we provide a rationale for raising taxes on successive taxation even when governments internalize the effect of successive taxation on welfare. Facultad de Ciencias Económicas |
description |
This paper analyzes multi-stage taxation by provinces in a federal country, using a two- good, two-province, two-stage successive differentiated-product symmetric oligopoly model, where each producer is located in a province and sells its product through exclusive retailers located in both provinces. Retailers compete for consumers a la Bertrand with differentiated products. The producer-retailer setup allows provincial governments to raise taxes on both upstream and downstream links of the value chain. We solve a simultaneous and non-cooperative tax competition problem, where (symmet- ric) provinces choose tax rates to maximize welfare subject to a revenue constraint. We find that provinces set tax rates to either raise revenue at only one segment of the value chain or use a combination of upstream and downstream taxation. This choice is determined by the revenue requirement, the size of the market and the degree of downstream competition. We characterize and discuss each possible case. Comparing the results of this model with the Leviathan case (analyzed in a previous paper by the authors) where governments behave as revenue maximizers, we find that there is a threshold on revenue requirement such that welfarist governments tend to behave qual- itatively similar to Leviathan governments when revenue need exceed the threshold: they both choose a combination of taxes if products have some degree of heterogeneity, whereas they rely on downstream taxation when products are homogeneous. This way we provide a rationale for raising taxes on successive taxation even when governments internalize the effect of successive taxation on welfare. |
publishDate |
2017 |
dc.date.none.fl_str_mv |
2017-12 |
dc.type.none.fl_str_mv |
info:eu-repo/semantics/conferenceObject info:eu-repo/semantics/publishedVersion Objeto de conferencia http://purl.org/coar/resource_type/c_5794 info:ar-repo/semantics/documentoDeConferencia |
format |
conferenceObject |
status_str |
publishedVersion |
dc.identifier.none.fl_str_mv |
http://sedici.unlp.edu.ar/handle/10915/123323 |
url |
http://sedici.unlp.edu.ar/handle/10915/123323 |
dc.language.none.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
info:eu-repo/semantics/altIdentifier/isbn/978-987-28590-5-3 info:eu-repo/semantics/altIdentifier/url/https://aaep.org.ar/anales/works/works2017/cont_fernandez.pdf info:eu-repo/semantics/altIdentifier/issn/1852-0022 |
dc.rights.none.fl_str_mv |
info:eu-repo/semantics/openAccess http://creativecommons.org/licenses/by-nc-sa/4.0/ Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) |
eu_rights_str_mv |
openAccess |
rights_invalid_str_mv |
http://creativecommons.org/licenses/by-nc-sa/4.0/ Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) |
dc.format.none.fl_str_mv |
application/pdf |
dc.source.none.fl_str_mv |
reponame:SEDICI (UNLP) instname:Universidad Nacional de La Plata instacron:UNLP |
reponame_str |
SEDICI (UNLP) |
collection |
SEDICI (UNLP) |
instname_str |
Universidad Nacional de La Plata |
instacron_str |
UNLP |
institution |
UNLP |
repository.name.fl_str_mv |
SEDICI (UNLP) - Universidad Nacional de La Plata |
repository.mail.fl_str_mv |
alira@sedici.unlp.edu.ar |
_version_ |
1844616175045050368 |
score |
13.070432 |