Vertical integration and production inefficiency in the presence of a gross receipts tax

• 成果类型: Article
• 署名作者: Hansen, Benjamin; Miller, Keaton; Weber, Caroline
• 署名单位: University of Oregon; National Bureau of Economic Research; IZA Institute Labor Economics; University of Kentucky
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2022.104693
• 发表日期: 2022
• 关键词: Gross receipts tax; Turnover tax; vertical integration; natural experiment; cannabis; excise tax

摘要

We quantify the effects of a gross receipts tax (GRT) on vertical integration for the first time. We use data from the Washington state recreational cannabis industry, which has numerous advantages including a clean natural experiment: a 25% GRT imposed on cannabis firms was subsequently replaced by an excise tax at retail. We find the short-run elasticity of vertical integration with respect to the intermediate good net-of-tax rate is -0.15 and the long-run elasticity is about twice as large. We find these incentives lead to large output losses - production increases by 23 percent when the GRT is eliminated. (c) 2022 Elsevier B.V. All rights reserved.