مالیات های واحد در برابر مالیات های تبلیغ روی قیمت : تعادل عمومی در انحصار

We show that if a monopoly sector is imbedded in a general equilibrium framework and profits are taxed at one hundred percent, then unit (specific) taxation and ad valorem taxation are equivalent on the set of Pareto optima.

It is well-known that, in a competitive environment, unit (or specific) taxation and ad valorem taxation are equivalent. Cournot (1838, 1960) realized that the two tax systems needed different treatment in the case of monopoly. Wicksell (1896, 1959) argued that ad valorem taxes dominate unit taxation in a monopoly; a complete demonstration of this dominance was given by Suits and Musgrave (1953). More specifically they demonstrated, if the consumer price and quantity of the monopoly good remained unchanged, that the government tax yield is higher with ad valorem taxes than under a regime of unit taxes. This is possible because typically the profit-maximizing price of the monopolist is lower under ad valorem taxation than under unit taxation. Recently Skeath and Trandel (1994; p. 55) state, more explicitly, that “in the monopoly case, given any unit excise tax, it is possible to find an ad valorem tax that Pareto dominates it.” It is this issue of the dominance that we investigate in this paper. We pursue this question in the context of a general equilibrium model and ask if ad valorem taxes Pareto dominate units taxes (or conversely). More specifically, we take a standard general equilibrium model in which a single monopoly sector has been imbedded. In particular we adapt the model of Guesnerie and Laffont (1978) (hereafter GL) to pose this question assuming as in GL that the government taxes profits at 100%. We first characterize the set of Pareto optima in the economy with unit taxation. We then convert the associated equilibria with unit taxes to an equivalent set of equilibria with ad valorem taxes and ask if there exist any feasible ad valorem tax Pareto improvements from this equilibrium. We show that there are none. We then reverse this procedure and characterize the set of Pareto optima with ad valorem taxes, convert these equilibria to unit tax equilibria, and then show that there are no possible Pareto improvements using unit taxes.

In the context of a simple general equilibrium model with a monopoly sector we have shown that in a very special case – one hundred percent profit taxation – that the set of unit-tax Pareto optima is identical to the set of ad valorem-tax Pareto optima. Earlier writers who have claimed that ad valorem taxes dominate unit taxes did not make any claim about optimal taxes. However, given that the Pareto optimal sets are identical this point is moot. A non optimal unit tax is dominated by a Pareto optimal unit tax and a Pareto optimal ad valorem tax and conversely. We have not addressed the problems that arise when there is less than one hundred percent profit taxation. If any individual owns shares in the monopoly then that individual's income changes when moving from one tax system to another. This means that one cannot directly replicate a unit-tax equilibrium with an ad valorem tax equilibrium. This remains as a work for the future.