442,318 research outputs found

    Considering a Consumption Tax

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    A combination of electronic commerce and the Flat Tax could eliminate the IRS as we know it

    Occupy Wall Street, Distributive Justice, and Tax Scholarship: An Ideology Critique of the Consumption Tax Debate

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    [Excerpt] “This Article argues that the pro-consumption tax literature is wrong to claim that no legitimate fairness objections to the consumption tax exist. It argues that the persistent and widespread wariness about replacing our current hybrid consumption tax/income tax system with a pure consumption tax is, contrary to what the pro-consumption tax literature asserts, completely justified. In fact, our reservations about the consumption tax’s fairness reflect legitimate concern about the role of capitalist power in America, particularly over the past thirty years. Indeed, the more the nation continues to experience the social welfare effects of increased capitalist power, the more compelling these objections become. History proves these concerns not just legitimate, but paramount. A full account, not a dismissal, of how capitalist power might benefit from a consumption tax is what would be required to meet these fairness objections. Part II of this Article fleshes out the fairness objections more fully and addresses the counter arguments that exist in the literature. In doing so, it seeks to reestablish the legitimacy of fairness objections to a consumption tax and encourage more robust and historically aware considerations of distributive justice in tax policy. Part II goes further and shows that the consumption tax literature gets it wrong in a particularly revealing way. Part II characterizes the pro-consumption tax literature’s dismissal of serious fairness and distributive justice concerns as, essentially, ideological; the literature’s very framing of the fairness issue precludes any serious consideration of the historical reality of capitalist power. Ideology, not argument, supports the claim that capitalist power is not a concern.

    Consumption taxes : macroeconomic effects and policy issues

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    Proposals for fundamental reform of the federal tax code are receiving increased attention in the business press and among economic analysts and policymakers. President Bush has identified tax reform as a top priority, calling for a tax system that is “pro-growth, easy to understand, and fair to all.” Moreover, the President has appointed a commission to consider different approaches to tax reform. One approach might be to improve the current income-based federal tax code, perhaps by broadening the tax base and lowering income-tax rates. However, another approach might be to replace current income taxes altogether with a consumption tax. Switching the federal tax system from an income tax to a consumption tax could have important macroeconomic effects. Most economists believe that switching to a consumption tax could increase saving and real output per person over the long run, although studies differ on the size of these effects. However, switching to a consumption tax might also require sizable short-run economic adjustments and create challenges for monetary policymakers. Garner analyzes the macroeconomic effects of replacing the current federal tax system with a consumption tax. First, he provides some background on the goals of tax reform and the basic difference between an income tax and a consumption tax. Next, he describes three widely discussed versions of a consumption tax: a national retail sales tax, a value-added tax, and a consumption-type flat tax. Finally, he examines the macroeconomic effects of adopting a consumption tax. All three proposals could raise U.S. output over the long run, but adopting a consumption tax could have sizable transition effects as well. These transition effects could vary depending on which consumption tax was adopted and how monetary policy responded to the reforms.Consumption (Economics) ; Taxation ; Tax reform

    Taxing Sweets: Sweetener Input Tax or Final Consumption Tax?

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    In order to reduce obesity and associated costs, policymakers are considering various policies, including taxes, to change consumers’ high-calorie consumption habits. We investigate two tax policies aimed at reducing added sweetener consumption. Both a consumption tax on sweet goods and a sweetener input tax can reach the same policy target of reducing added sweetener consumption. Both tax instruments are regressive, but the associated surplus losses are limited. The tax on sweetener inputs targets sweeteners directly and causes about five times less surplus loss than the final consumption tax. Previous analyses have overlooked this important point.consumption tax; demand; health policy; soda tax; sugar; added sweeteners

    A Sales Tax Is Better at Promoting Healthy Diets than the Fat Tax and the Thin Subsidy

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    We analyze how a sales tax levied on all food products impacts the consumption of healthy food, unhealthy food, and obesity. The sales tax can stimulate the consumption of healthy meals by lowering the time costs of food preparation. Moreover, the sales tax lowers obesity under more general conditions than a tax on unhealthy food (fat tax) and a subsidy on healthy food (thin subsidy). We calibrate the model using recent consumption and time use data from the US. The thin subsidy is counterproductive and increases weight. While both the sales tax and the fat tax mitigate obesity, the former imposes a lower excess burden on consumers.TU Berlin, Open-Access-Mittel - 201

    Taxing Sweets: Sweetener Input Tax or Final Consumption Tax?

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    In order to reduce obesity and associated costs, policymakers are considering various policies, including taxes, to change consumers’ high-calorie consumption habits. We investigate two sweet tax policies aimed at reducing added sweetener consumption. Both a consumption tax on sweet goods and a sweetener input tax can reach the same policy target of reducing added sweetener consumption. Both tax instruments are regressive but the associated surplus losses are limited. The tax on sweetener inputs targets sweeteners directly and causes about five times less surplus loss than the final consumption tax. Previous analyzes have overlooked this important point.consumption tax, sugar, added sweeteners, demand, health policy, soda tax, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Health Economics and Policy,

    Consumption Tax Options for California

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    Reviews concerns about the state's current tax system and evaluates potential consumption-based tax reforms, including retail sales tax reform, corporate income tax reform, gross receipts tax, value added tax, and sales-apportioned tax on value added

    Are Income and Consumption Taxes Ever Really Equivalent? Evidence from a Real-Effort Experiment with Real Goods

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    The public finance literature demonstrates the equivalence between consumption and labor-income (wage) taxes. We introduce an experimental paradigm in which individuals make real labor-leisure choices and spend their earned income on real goods. We use this paradigm to test whether a labor-income tax and an equivalent consumption tax lead to identical labor-leisure allocations. Despite controlling for subjects’ work ability and inherent labor-leisure preferences and disallowing saving, subjects reduce their labor supply significantly more in response to an income tax than to an equivalent consumption tax. We discuss the economic implications of a policy shift to a consumption tax.experimental economics, tax equivalence, income tax, consumption tax, behavioral economics

    Status, environmental externality, and optimal tax programs

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    This paper studies the designs of optimal tax programs in OLG economies when first, consumption of one household lowers (status) utility of others, and second, consumption harms the environment. Status seeking raises optimal consumption tax rates, and lowers optimal tax rates on capital income.consumption tax
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