ad valorem tax


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Ad valorem tax

A type of tax calculated based on percentage of gross or stated value. For example, VAT.

Ad Valorem Tax

A tax calculated as a percentage of the value of an asset. Most property taxes are ad valorem taxes because the property owners owe a given percentage of the market value the property. Value-added taxes are another common example.

ad valorem tax

A tax that is computed as a percentage of the value of specific property. For example, many states levy an annual tax on the market value of an investor's securities as of a certain date. Also called property tax.

ad valorem tax

a TAX which is levied as a percentage of the price or value of a unit of OUTPUT. See VALUE ADDED TAX. Compare SPECIFIC TAX.

ad valorem tax

a TAX that is levied as a percentage of the price of a unit of output. See SPECIFIC TAX, VALUE-ADDED TAX.

ad valorem tax

Literally means “according to the value.”A tax placed upon property and calculated with reference to the value of the property. Ad valorem taxes usually have a super-priority, so that a sale for unpaid taxes will transfer title into the buyer, free and clear of any mortgages or other liens. On the other hand, lienholders are generally given the right to redeem property from tax sales, and regain all rights simply by reimbursing the purchaser for the sale price plus accrued interest.

References in periodicals archive ?
a] hinges on the fact that an ad valorem tax can be seen to have two distinct effects on market behavior.
In the presence of an ad valorem tax, the market reacts to realized demand in a way that equalizes the marginal foregone net consumption benefit [P.
It follows that an ad valorem tax set equal to this proportion maximizes welfare for any realization of demand.
This fact arises because a horizontal supply curve means that the per-unit value of an ad valorem tax is invariant to demand shifts.
In the presence of demand uncertainty, however, the comparison of quotas and specific taxes is largely irrelevant, because the ad valorem tax is never dominated by both of the other policies.
To compare the ad valorem tax to the quota, note that equations (2) and (5) imply that the sign of [L.
q] and the ad valorem tax is preferred to the quota.
The ad valorem tax is preferred to the quota for all values of f [is less than] [f.
u]/du [is less than] 0, the output under the ad valorem tax ([Q.
The actual level of the revenue-maximizing tax rate u* cannot be identified from the Blinder [1981] elasticity rule since u* is not an ad valorem tax rate.
Hence, the unit tax may be superior to the ad valorem tax for small- or medium-sized utility companies or utilities whose output is relatively more sensitive to the unit tax.
In addition, the Suits and Musgrave's conclusion of the superior yield of an ad valorem tax at a given output can apply to a regulated monopolist if the marginal product of labor under the ad valorem tax is greater than or equal to the marginal product of labor under the unit tax.