In this article we will discuss about the effects of excise taxes in a competitive industry. Excise taxes, also known as commodity taxes, are imposed on the production of commodities generally on a per unit basis. The tax is paid to the government by the producer rather than the buyer. (But this will not change in any way the effects [...]
In this article we will discuss about the imposition of lump-sum taxes in monopoly. Monopolies may be regulated by means of imposition of lump-sum taxes. Since a lump-sum tax is like a fixed cost to a monopolist, its imposition will result in an upward shift of his total cost (TC) curve by a vertical distance equal to the amount of [...]
The below mentioned article provides a comparative study of lump-sum tax, profit and sales tax in monopoly. In the case of a monopoly, a lump-sum or a profit tax is better than a sales tax. This is because a lump-sum tax, or a profit-tax with a marginal rate less than 100 per cent, will reduce the profit after taxes of [...]