Commodity Tax Harmonization in the European Community: A General Equilibrium Analysis of Tax Policy Options in the Internal Market (Studies in Contemporary Economics) Book

	Introduction	1
1	The Policy Setting	7
1.1	Basic Concepts of International Taxation	7
1.2	The Harmonization Process in the EC	11
1.3	Feasible International Tax Principles	21
2	Theoretical Aspects	29
2.1	Introduction: Domestic Taxes and Foreign Trade	29
2.2	Trade Distortions vs. Domestic Efficiency	32
2.3	Fiscal vs. Political Externalities	35
2.4	Optimal Taxation vs. Tax Reform Analysis	41
2.5	Application to EC Policy Issues	43
3	A Dual General Equilibrium Framework	47
3.1	The Trade Model and its Assumptions	47
3.2	Dual Functions and their Properties	49
3.3	Introducing General Commodity Taxes	53
3.4	General Tax Principles	56
4	Restricted Destination Principle	59
4.1	The Two-Country Model	59
4.2	Tax Reform and Terms of Trade Changes	63
4.3	Introducing Changes in the Tax Base	68
4.4	Global Welfare Effects of Tax Reform	73
5	Restricted Origin Principle	77
5.1	The Three-Country Model	77
5.2	Tax Reform in the Small-Union Case	82
5.3	Tax Reform with Endogenous World Prices	90
5.4	Supplement: Trade Deflection	102
5.5	Summary: The Limitations of Theoretical Analysis	104
6	Alternative Tax Principles: A Numerical Comparison	107
6.1	The Empirical Model	109
6.2	The Data Base	111
6.3	Simulation Results for Homogeneous Goods	119
6.4	Extending the Model: Differentiated Goods	133
6.5	A Second-Best Tax Principle for the EC	144
7	Tax Rate Harmonization	147
7.1	Public Goods in the Dual Framework	148
7.2	Heterogeneous Preferences for Public Goods	151
7.3	Tax Competition and Public Good Supply	160
7.4	Optimal Tax Rate Harmonization in the EC	175
8	Summary and Outlook	179
8.1	Summary: Evaluating the Policy Choices	179
8.2	Outlook: International Capital Movements	185
	Appendix A: Derivation of Selected Equations	189
	Appendix B: MPS/GE Simulation Results	195
	Appendix C: List of Symbols Used	201
	Bibliography	203