This paper reviews issues and evidence concerning tax-motivated, cross-border commodity transactions. A distinction is drawn between ""arbitrage trades"" (driven by cross-country differences in tax rates) and ""tax not paid"" transactions (motivated by the opportunity to pay no tax at all on...

Atkinson and Stiglitz show that with weakly separability, differential commodity taxes are unnecessary given an optimal nonlinear income tax. Deaton showed that with an optimal linear progressive income tax, commodity taxes are superfluous under weakly separable and linear Engel curves. Using...

Atkinson and Stiglitz show that with weakly separability, differential commodity taxes are unnecessary given an optimal nonlinear income tax. Deaton showed that with an optimal linear progressive income tax, commodity taxes are superfluous under weakly separable and linear Engel curves. Using...