TY  - JOUR
AU  - Metcalf,Gilbert E.
AU  - Norman,George
TI  - Oligopoly Deregulation and the Taxation of Commodities
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9415
PY  - 2003
Y2  - January 2003
UR  - http://www.nber.org/papers/w9415
L1  - http://www.nber.org/papers/w9415.pdf
N1  - Author contact info:
Gilbert E. Metcalf
Room 3221
Department of the Treasury
Washington, DC 20220
1500 Pennsylvania Ave., NW
Tel: 202-622-0173
E-Mail: gilbert.metcalf@tufts.edu

George Norman
Tufts University
Department of Economics
Medford MA 02155
E-Mail: george.norman@tufts.edu
AB  - We examine the interplay between market structure and the form that commodity taxation should take in a world in which firms produce differentiated products and so are able to exert some degree of market power. Our analysis takes explicit account of two important recent developments that carry significant implications for market structure and so for the appropriate design and effectiveness of commodity taxation: market deregulation and technological change. In the presence of price discrimination, we find that tax policy loses much of its effectiveness at serving as a substitute for direct regulation. Moreover, in cases where taxes can influence market structure, subsides rather than taxes may be required to achieve optimum market structure.
ER  -