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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/11250/166194
Date
2009-02
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  • Working papers (SNF) [809]
Abstract
Marginal indirect tax reform analysis evaluates for each commodity (group) the marginal welfare cost (MC) of increasing government revenue by one 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 parameterized on the basis of econometric demand analysis.
Publisher
SNF
Series
Working paper
2008:37

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