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On the Taxation of Trade Within and Between Households

CES Working Paper at Univ. of Munich No. 146

Posted: 24 Feb 1998  

Patricia F. Apps

The University of Sydney Law School ; IZA Institute of Labor Economics

Ray Rees

Ludwig Maximilian University of Munich - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 1997

Abstract

Tax reform proposals affect individual welfares in ways which strongly depend on the nature of specialization in household production and the pattern of trade within households. Variation in the degree of specialization in domestic production across households strongly influences the impacts on individual tax burdens of a given tax reform. The standard models of the economics literature cannot be used to analyze these issues because they ignore the two-person nature of households and the existence of household production and trade. This paper proposes a simple and tractable model to remedy this and uses it to analyze the impacts of the types of tax reform that have been the subject of recent policy debate.

JEL Classification: H21, H31, J22

Suggested Citation

Apps, Patricia F. and Rees, Ray, On the Taxation of Trade Within and Between Households (October 1997). CES Working Paper at Univ. of Munich No. 146. Available at SSRN: https://ssrn.com/abstract=56283

Patricia Apps (Contact Author)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

The University of Sydney Law School ( email )

Faculty of Law, New Law Building F10
The University of Sydney
Sydney, NSW 2006
Australia
+61 2 9351 0241 (Phone)
+61 2 9351 0200 (Fax)

Ray Rees

Ludwig Maximilian University of Munich - Faculty of Economics ( email )

Munich, D-80539
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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