Abstract
I investigate how the burden of consumption taxes not borne by consumers is shared between upstream firms that produce a taxed good and downstream firms that sell the goods. Using novel data on monthly brand-level cigarette wholesale prices and retail prices from Nielsen Homescan data, I find that taxes are passed through to wholesale and retail prices at rates of 0.80 and 0.72. The results suggest that downstream firms selling cigarettes bear no more than one-third of the firm share of the tax burden.
Original language | English (US) |
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Pages (from-to) | 427-450 |
Number of pages | 24 |
Journal | National Tax Journal |
Volume | 71 |
Issue number | 3 |
DOIs | |
State | Published - Sep 2018 |
Keywords
- Consumption taxes
- Supply chain
- Tax incidence
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics