On Pareto improving commodity tax changes under fiscal competition

This paper shows that when a ‘non-cooperative fiscal equilibrium’ of the Mintz-Tulkens 1986 model of tax competition is inefficient, Pareto improving changes are positive for the taxes of both regions, under concavity of the regions' welfare functions. It also identifies a class of such equilib...

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Bibliographic Details
Published inJournal of public economics Vol. 41; no. 3; pp. 335 - 350
Main Authors de Crombrugghe, Alain, Tulkens, Henry
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.04.1990
Elsevier
Elsevier Sequoia S.A
SeriesJournal of Public Economics
Subjects
Commodities
Competition
Consumption function
Economic models
Economic theory
Effects
Increases
Pareto optimum
Taxes
Utility functions
Welfare economics
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Summary:This paper shows that when a ‘non-cooperative fiscal equilibrium’ of the Mintz-Tulkens 1986 model of tax competition is inefficient, Pareto improving changes are positive for the taxes of both regions, under concavity of the regions' welfare functions. It also identifies a class of such equilibria that are always efficient.
ISSN:0047-2727
1879-2316
DOI:10.1016/0047-2727(90)90065-P