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Operational expressions for the marginal cost of indirect taxation when merit arguments matter

Schroyen, Fred
Working paper
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URI
http://hdl.handle.net/11250/162744
Date
2005-02
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  • Discussion papers (SAM) [638]
Abstract
Marginal indirect tax reform analysis evaluates for each commodity

(group) the marginal welfare cost (MC) of increasing government

revenue with 1 Euro by raising the indirect tax rate on that commodity.

In this paper, I propose an adjustment to the MC-expressions to

allow for (de)merit good arguments and show how this adjustment can

easily be parameterised on the basis of econometric demand analysis.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2005:3

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