The paper discusses the main arugments for destination-versus-origin-based commodity taxation in the European Community's Internal Market. Destination-based solutions necessarily distort commodity trade in the Community because final consumer purchases can only be taxed in the origin country. On...

This paper investigates the macroeconomic and welfare effects of an anticipated future switch from destination- to origin-based commodity taxation. We set up an intertemporal representative agent model of an open economy and study especially consumption, investment and trade balance responses to...