On Market Structure and the Taxation of Exhaustible Resources: |
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Authors: | M H I Dore |
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Institution: | M. H. I. Dore, Ph.D., is professor of economics, Brock University. St. Catharines, Ontario L2S 3A1, Canada, and Visiting Scholar, Cambridge University, England |
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Abstract: | A bstract . The older static theory of the taxation of exhaustible resources is distinguished from the modern theory based on the work of Harold Hotelling Both advocate some form of a profits-based tax , which is appropriate for conditions of perfect competition. But an oligopolistic market structure has additional quasi-rents which could be captured through taxation. It is argued that a sales tax will not only capture the rents but also lower the cut-off grade of the ore mined. |
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