Cascading, revenue neutrality and the VAT: Some theoretical results.

The conventional conclusion is that, ceteris paribus, a revenue-neutral VAT would have no impact on the aggregate price level, unless it elicits a supply response due to a lower degree of distortions. This paper shows that even if we ignore supply response, a revenue-neutral VAT can lead to higher output and lower price in a demand-constrained output regime. However, price will remain unchanged in a supply-constrained output regime.

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Year of publication:	1997-04
Authors:	Mukhopadhyaya, Hiranya
Subject:	Value added tax

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Working Paper 3, 1997 1 pages long
Classification:	H20 - Taxation, Subsidies, and Revenue. General ; H22 - Incidence
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005587202