Skip to main content Accessibility help
×
Hostname: page-component-78c5997874-xbtfd Total loading time: 0 Render date: 2024-11-08T00:29:04.215Z Has data issue: false hasContentIssue false

8 - Taxes in a CGE Model

Published online by Cambridge University Press:  11 December 2020

Mary E. Burfisher
Affiliation:
Purdue University, Indiana
Get access

Summary

This chapter examines the treatment of trade and domestic taxes in a computable general equilibrium (CGE) model. Trade taxes are imposed on imports and exports of goods and services. Domestic taxes are taxes paid by production activities on output and factor use and by purchasers on sales of intermediate and retail goods, and income taxes. We trace the tax data in a Social Accounting Matrix (SAM) to describe the agent and the economic activity on which the tax is levied and the amount of revenue generated by each tax; we also show how to use the SAM’s data to calculate tax rates. Partial equilibrium diagrams then illustrate the theoretical effects of taxes on economic activity and welfare. The results of tax policy experiments using a CGE model support the theoretical predictions and offer insight into the economywide effects of each tax. Three applied examples of tax policy analysis explore the second-best welfare effects of a tax, the marginal welfare impacts of a country’s entire tax structure, and the elimination of import tariffs in a preferential trade agreement.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 2021

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

  • Taxes in a CGE Model
  • Mary E. Burfisher, Purdue University, Indiana
  • Book: Introduction to Computable General Equilibrium Models
  • Online publication: 11 December 2020
  • Chapter DOI: https://doi.org/10.1017/9781108780063.009
Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

  • Taxes in a CGE Model
  • Mary E. Burfisher, Purdue University, Indiana
  • Book: Introduction to Computable General Equilibrium Models
  • Online publication: 11 December 2020
  • Chapter DOI: https://doi.org/10.1017/9781108780063.009
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Taxes in a CGE Model
  • Mary E. Burfisher, Purdue University, Indiana
  • Book: Introduction to Computable General Equilibrium Models
  • Online publication: 11 December 2020
  • Chapter DOI: https://doi.org/10.1017/9781108780063.009
Available formats
×