Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207243 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7852
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We study commodity taxation in markets where firms, such as Internet Service Providers, energy suppliers and payment card platforms, adopt multi-part tariffs. We show that ad valorem taxes can correct underprovision and hence increase welfare, provided the government applies differentiated tax rates to the usage and access parts of the tariff. We obtain this result in different settings, including vertically interlinked markets, markets where firms adopt menus of tariffs to screen consumers and where they compete with multi-part tariffs. Our results suggest that exempting these markets from taxation may be inefficient.
Subjects: 
commodity taxation
multi-part tariffs
price discrimination
JEL: 
D42
D61
H21
Document Type: 
Working Paper
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