Spatial taxation effects on regional coal economic activities
Spatial taxation effects related to economic activities at the regional level can be directly evaluated using the Kuhn-Tucker system of equations based on a commodity model. In particular, the impacts of a specific tax are predictable within a given set of trade patterns. However, the impacts of an ad valorem tax are difficult to evaluate analytically, mainly because of nonlinearity in the associated response surface. The aspect of spatial-taxation analysis of present relevance for the coal industry related to coal policy, i.e., the share of tax burdens coal producers and consumers are able to bear. Each supplier in a given market boundary shares the same amount of tax burden, which may eliminate the weakest coal producers, i.e., Southern West Virginia coal mines. The same analogy also applies to the weakest demand region, i.e., Illinois, Wisconsin, and Minnesota utilities. Consequently, a proper policy requires that some preferential tax treatment be given to these regions. Since the taxation effects depend critically on the trade patterns and market boundaries, the successful policy application of present regional energy models will not be possible unless effects of this type are included in the evaluation.
- Research Organization:
- West Virginia Univ., Morgantown
- OSTI ID:
- 6806596
- Journal Information:
- Mater. Soc.; (United States), Vol. 4:3
- Country of Publication:
- United States
- Language:
- English
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