Open AccessMarkup Rules And The Incidence Of A Value-Added Tax At Different Stages Of The Production And Distribution Process
Author(s) -
Edward L. Fitzsimmons
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v10i2.5933
Subject(s) - markup language , purchasing , business , distribution (mathematics) , value (mathematics) , value added tax , production (economics) , tax incidence , commerce , industrial organization , ad valorem tax , economics , marketing , microeconomics , computer science , xml , double taxation , finance , public economics , mathematics , machine learning , mathematical analysis , operating system
The burden of a value-added tax is distributed each time the ownership of merchandise changes as the merchandise moves down-stream through distribution channels to consumers. Other things being equal, the burden of the tax on retailers or other vendors purchasing merchandise for resale is determined by the markup rule chose by retailers or other vendors. Given the markup rules discussed, a fixed-percentage markup is shown to minimize the value-added tax burden on firms purchasing merchandise for resale.