Abstract
In oligopoly, comparison of the tax pass-through favors the use of ad valorem taxes compared to unit taxes. We argue that, in addition to differences in tax pass-through, the two taxes have a dissimilar effect on firms' strategic interaction. The anticompetitive effects of the two taxes favor unit taxes over ad valorem taxes. We show both when there is a preference for unit taxation and when it is likely that the conventional preference for ad valorem taxation is upheld.
| Original language | English |
|---|---|
| Journal | Public Finance Review |
| Volume | 42 |
| Issue number | 4 |
| Pages (from-to) | 532-551 |
| Number of pages | 19 |
| ISSN | 1091-1421 |
| Publication status | Published - 2014 |
| Externally published | Yes |