The VAT is compared to a turnover tax (TT) given monopoly final goods and intermediate goods firms interacting strategically. Linear demands and constant costs are assumed. Via examples it is shown that for both "Cournot" and "Stackelberg" games, a revenue neutral VAT may not exist to a given...

A widespread objection to the introduction of consumption tax systems claims that this would lead to high tax revenue losses. This paper investigates the revenue effects of a consumption tax reform in Germany. Our results suggest that the revenue losses would be surprisingly low. We find a...