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Cover of: Tax Principles and Tariff-Tax Reforms
Kenji Fujiwara

Tax Principles and Tariff-Tax Reforms

Section: Articles
Volume 71 (2015) / Issue 3, pp. 360-370 (11)
Published 09.07.2018
DOI 10.1628/001522115X14331675558843
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  • 10.1628/001522115X14331675558843
This paper develops a two-country general-equilibrium model to examine the welfare effect of tariff-tax reforms that fix the world price. We show that this reform improves welfare if a production tax is adjusted, but that it reduces welfare if a consumption tax is used. Moreover, this result is reversed in the export tax case. In short, the proposed policy reform improves welfare depending on whether imports and exports are taxed, as well as on tax principles.