Taxes, Tariffs, and the Global Corporation

24 Pages Posted: 25 Jul 2007 Last revised: 27 Jul 2010

See all articles by James A. Levinsohn

James A. Levinsohn

University of Michigan; National Bureau of Economic Research (NBER)

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Date Written: October 1990

Abstract

In this paper we develop some simple models of optimal tax and tariff policy in the presence of global corporations that operate in an imperfectly competitive environment. The models emphasize two important differences in the practical application of tax and tariff policy - tax, but not tariff, policy can apply to offshore output and tariff, but not tax, policy can be industry-specific. Recognizing the multinationals' production decisions are endogenous to the tax and tariff policies they face, we investigate optimal tax or subsidy policies for domestically owned firms and optimal trade policy.

Suggested Citation

Levinsohn, James A. and Slemrod, Joel B., Taxes, Tariffs, and the Global Corporation (October 1990). NBER Working Paper No. w3500. Available at SSRN: https://ssrn.com/abstract=467657

James A. Levinsohn (Contact Author)

University of Michigan ( email )

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Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business ( email )

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United States

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