Discriminatory Features of Domestic Factor Tax Systems in a Goods Mobile-Factors Immobile Trade Model
An Empirical General Equilibrium Approach
Bibliographic Data
| ID | 10178053 |
|---|---|
| Authors | John Whalley (corresponding author) |
| Year | 1980 |
| Volume | 88 |
| Issue | 6 |
| Pages | 1177-1202 |
| Publication date | 1980-12-01 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/260934 |
| OpenAlex | W2047367458 |
| Language | EN |
| References cited | 9 |
A recently constructed numerical general equilibrium model of domestic and foreign trade activity for the United States, the (nine-member) EEC, and Japan is used to analyze the effects of removing distortions in domestic factor taxes, taking into account international trade flows. As is conventional in the general equilibrium tax literature, corporate and property taxes are treated as ad volorem taxes on capital use by industry and social security taxes as ad valorem taxes on labor use by industry. National accounts sources are used both to obtain model equivalent tax rates by trading area and to construct a benchmark data set with which to estimate the model. Results suggest that under some assumptions current factor tax structures can produce significant terms-of-trade gains, and in the U.S. case results show welfare losses occurring from the removal of existing distortions. This result contrasts with conventional closed economy analysis of distorting factor trades and is explained by national terms-of-trade losses which more than outweigh the gains from removal of domestic distortions. The policy significance of this and other findings is discussed
Ad valorem tax · Applied general equilibrium · Capital (architecture · Economics · General equilibrium theory · International economics · Macroeconomics · Market economy · Microeconomics · Monetary economics · Public economics · Tax reform · Welfare · Corporate Taxation and Avoidance · Fiscal Policy and Economic Growth · Taxation and Compliance Studies
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| Highly cited | No |
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