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An Analysis of the Implications for the Gold Mining Industry of Alternative Tax Policies: A Regional Disaggregated Model for Australia *
Author(s) -
FELTENSTEIN ANDREW
Publication year - 1997
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1997.tb01004.x
Subject(s) - investment (military) , economics , construct (python library) , balance (ability) , balance of trade , section (typography) , gold standard (test) , international economics , macroeconomics , business , political science , medicine , statistics , mathematics , politics , computer science , advertising , law , physical medicine and rehabilitation , programming language
We construct a dynamic model of the Australian economy that has a regional sub‐section representing Western Australia. Within the West Australia sub‐economy, there is a separate technology for the gold mining industry. We implement the model, and simulate a 2.5 per cent tax on gold exports. The outcome shows no fiscal improvement at the national level, although the West Australian budget improves slightly. Real income falls both nationally and in West Australia as the trade balance deteriorates, and an increased real interest rur‐ causes investment to fall. We conclude that the taxation of gold exports leads to few measurable benefits.