Tax policy and the supply of exhaustible resources: theory and practice

Journal Article · Tue May 01 04:00:00 EDT 1984 · Land Econ.; (United States)

DOI:https://doi.org/10.2307/3145968· OSTI ID:6692061

Slade, M E

Relaxing the assumptions of earlier work, the author develops a general model for assessing the effects of taxation on resource extraction. The model is then econometrically estimated for a particular copper-producing firm, using numerical nonlinear optimization techniques to solve for optimal extraction and processing paths for the no-tax case. Various taxes and subsidies are imposed on the profit function, and new optimal extraction and processing paths are computed. When the undistorted (no-tax) and distorted paths are compared to determine the direction and magnitude of tax effects, it is found that the change in extraction paths resulting from a particular tax depends on where it falls, on how it affects input and output prices, and on the ease of substituting between the resource and other inputs in processing. 15 references, 4 figures, 7 tables.

• Research Organization: Univ. of British Columbia, Vancouver
• OSTI ID: 6692061
• Journal Information: Land Econ.; (United States), Journal Name: Land Econ.; (United States) Vol. 60:2; ISSN LAECA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
290400* -- Energy Planning & Policy-- Energy Resources
ECONOMIC IMPACT
ECONOMIC POLICY
FINANCIAL INCENTIVES
GOVERNMENT POLICIES
INCOME
INDUSTRY
MINERAL INDUSTRY
OPTIMIZATION
PROFITS
RESOURCE DEVELOPMENT
ROYALTIES
SEVERANCE TAX
SUBSIDIES
TAXES