Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Laspeyres-Paradox: tax overshifting in nineteenth century Prussia

The Laspeyres-Paradox: tax overshifting in nineteenth century Prussia Following the seminal work of the late nineteenth century economist Etienne Laspeyres I analyse the incidence of the Prussian milling and slaughter tax shortly before its repeal in 1875. A comparison of flour prices in cities which levied this tax with those that did not reveals unusually strong tax overshifting. Modern theories explain overshifting of a specific tax with quality improvements or imperfect competition. In pursuing these ideas I find that it was rather large surplus costs induced by tax collection and monitoring that caused unusually large excess burdens. The reason why the tax remained basically unchanged for more than half a century is that the urban bourgeoisie successfully prevented its repeal, as the alternative would have been the introduction of municipal direct taxes (rent-seeking behaviour). http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Cliometrica Springer Journals

The Laspeyres-Paradox: tax overshifting in nineteenth century Prussia

Spoerer, Mark
Cliometrica , Volume 2 (3) – Jan 25, 2008
Download PDF
21 pages

Loading next page...
 
/lp/springer-journals/the-laspeyres-paradox-tax-overshifting-in-nineteenth-century-prussia-qwT1hs5l1s

References (44)

Publisher
Springer Journals
Copyright
Copyright © 2008 by Springer-Verlag
Subject
Economics; Economic Theory/Quantitative Economics/Mathematical Methods; History, general; Econometrics; History of Economic Thought/Methodology; Statistics for Business/Economics/Mathematical Finance/Insurance
ISSN
1863-2505
eISSN
1863-2513
DOI
10.1007/s11698-007-0018-0
Publisher site
See Article on Publisher Site

Abstract

Following the seminal work of the late nineteenth century economist Etienne Laspeyres I analyse the incidence of the Prussian milling and slaughter tax shortly before its repeal in 1875. A comparison of flour prices in cities which levied this tax with those that did not reveals unusually strong tax overshifting. Modern theories explain overshifting of a specific tax with quality improvements or imperfect competition. In pursuing these ideas I find that it was rather large surplus costs induced by tax collection and monitoring that caused unusually large excess burdens. The reason why the tax remained basically unchanged for more than half a century is that the urban bourgeoisie successfully prevented its repeal, as the alternative would have been the introduction of municipal direct taxes (rent-seeking behaviour).

Journal

Cliometrica – Springer Journals

Published: Jan 25, 2008

There are no references for this article.