Abstract:<span>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 re… Show more
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