International commodity taxation in the presence of unemployment

• 成果类型: Article
• 署名作者: Moriconi, Simone; Sato, Yasuhiro
• 署名单位: University of Eastern Piedmont Amedeo Avogadro; University of London; London School Economics & Political Science; University of Osaka
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2009.03.002
• 发表日期: 2009
• 页码: 939-949
• 关键词: Commodity taxation; Destination principle; Origin principle; unemployment; Employment externality

摘要

In this paper, we evaluate the impact of commodity tax competition on welfare and employment under the destination and origin principles, when the labor market is imperfectly competitive owing to a binding fixed wage. Our main finding is that commodity taxation causes an employment externality whose signs may be opposite under the two principles. While tax competition leads to inefficient tax rates under both principles, we also prove that the origin principle guarantees lower unemployment and higher welfare when the fixed wage is high. Finally, we show that the employment externality still exists in a standard union model of wage determination. (C) 2009 Elsevier B.V. All rights reserved.