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Revenue-neutral tax policy under price uncertainty

Holloway, G. J. (1990) Revenue-neutral tax policy under price uncertainty. American Journal of Agricultural Economics, 72 (1). pp. 157-159. ISSN 0002-9092

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To link to this item DOI: 10.2307/1243155


The firm's response to revenue-neutral taxation is investigated under price uncertainty. Revenue-neutral policies adjust simultaneously the marginal tax rate and the level of exemptions while keeping expected tax receipts constant. Nonincreasing absolute risk aversion is sufficient to sign the firm's response: a reduction in the marginal rate causes the firm to contract output. Implications are established for the equilibrium level of treasury receipts.

Item Type:Article
Divisions:Life Sciences > School of Agriculture, Policy and Development > Department of Agri-Food Economics & Marketing
ID Code:30556
Publisher:Oxford University Press

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