It is well known that a consumer price-neutral reform of consumption taxes and import tariffs is welfare-improving. This paper shows that such price controls are inferior to quantity controls in terms of welfare improvement. The paper next turns to a comparison of different abatement strategies....

This paper shows that a consumption-neutral tax reform is a promising alternative to a revenue-neutral tax reform when the distortions introduced by tax hikes are very large and when governments seek revenues in the course of tax changes.