What Goes Up May Not Come Down: Asymmetric Incidence of Value-Added Taxes

• 成果类型: Article
• 署名作者: Benzarti, Youssef; Carloni, Dorian; Harju, Jarkko; Kosonen, Tuomas
• 署名单位: University of California System; University of California Santa Barbara; National Bureau of Economic Research; Congressional Budget Office; VATT Institute for Economic Research
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/710558
• 发表日期: 2020
• 页码: 4438-4474
• 关键词: consumption

摘要

This paper provides evidence that prices respond significantly more strongly to increases than to decreases in value-added taxes (VATs). First, using two plausibly exogenous VAT changes, we show that prices respond twice as much to VAT increases as to VAT decreases. Second, we show that this asymmetry results in higher equilibrium profits and markups. Third, we find that firms operating with low profit margins are particularly likely to respond asymmetrically to VAT changes. Fourth, these asymmetric price effects persist several years after VAT changes take place. Fifth, using all VAT changes in the European Union from 1996 to 2015, we find similar levels of asymmetry.