Year: 2025
Type: article
Abstract: The digital advertising tax is an increasingly used policy measure, but its consequences must still be better understood. We develop a theoretical model inspired by a recently introduced digital advertising tax in Maryland. While the tax may increase state-level tax revenues, we highlight an unexplored drawback of this policy. The unilateral ability of a country to tax advertising revenues generated in its territories leads to inefficiently high equilibrium tax rates. Our findings emphasize the need for a global initiative on digital platform taxation rather than leaving the decision to individual countries. JEL classification: F23, H21, M37
Source: Italian Economic Journal
Authors: Federico Innocenti, Alessandro Bucciol
Institutions: University of Konstanz, University of Verona
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,290
Funder: Universität Konstanz
OpenAlex ID: W4416912975