Replacing the U.S. Income Tax with a Progressive Consumption Tax: A Sequenced General Equilibrium Approach

This paper examines the welfare consequences of changing the current U.S. income tax system to a progressive consumption tax. We compute a sequence of single period equilibria in which savings decisions depend on the expected future return to capital. In the presence of existing income taxes, the U.S. economy is assumed to lie on a balanced growth path. With the change to a consumption tax, individuals save more and initially consume less. As the capital stock grows, consumption eventually overtakes that of the original path, and the economy approaches the new balanced growth path with higher consumption and a greater capital stock. Both the transition and the balanced growth paths enter our welfare evaluations. We find that the discounted present value of the stream of net gains is approximately $650 billion in 1973 dollars, just over one percent of the discounted present value of national income. Larger gains occur if further reform of capital income taxation accompanies the change. We examine the sensitivity of the results, both to the design of the consumption tax and to the values of elasticity and other parameters. The paper also contains estimates of the time required to adjust from one growth path to the other.

The Welfare Cost of Distortions in the United States Tax System: A General Equilibrium Approach

Using a general equilibrium model of the United States economy,we examine the combined welfare cost of all taxes in the U.S. revenue system.We find that the welfare losses caused by distortionary taxation can be very large, both on average and at the margin.The marginal welfare loss to consumers from raising an additional dollar of revenue is in the range of 34 cents to 48 cents, depending on certain elasticities. This has very important implications for cost-benefit analysis.If a public project must be financed by distortionary taxes which cause dead-weight loss, this excess burden must be taken into account when we decide whether to undertake the project. Our calculations indicate that the marginal deadweight loss is between one-third and one-half of marginal revenues. This large wedge could cause us to approve many fewer projects than we would approve if we were to use the simple condition that the sum of the marginal rates of substitution should equal the marginal rate of transformation.The average deadweight loss per dollar of revenue is smaller than the marginal deadweight loss, but it is still substantial. We estimate that the present value of the gain from replacing the distortionary tax system with certain lump sum taxes would be in the range of $1.8 trillion to$3.1 trillion,or 13 cents to 22 cents per dollar of revenue. The gains would be about 60 percent as great if the existing system were replaced with a proportional income tax. Replacing the existing system with a consumption-type value-added tax would give even greater gains than those from switching to a proportional income tax.

Cultural political economy and urban heritage tourism

The paper explains a cultural political economy “framing” for interpreting heritage tourism in urban contexts. Key ideas behind this research perspective are explained and illustrated through discussion of past research studies of urban heritage tourism. It is underpinned by a relational view of the inter-connectedness of societal relations, and an emphasis on taking seriously both the cultural/semiotic and the economic/political in the co-constitution of urban heritage tourism’s social practices and features. A case study of heritage tourism in Nanjing, China considers cultural political economy’s relevance and value, including the distinctive research questions it raises. It reveals, for example, how economic relations in the built environment were related to tourist meaning-making and identities in the cultural/semiotic sphere

‘Real change comes from below!’: walking and singing about places that matter; the formation of Commoners Choir

This article details the first event Commoners Choir performed: a singing and walking project, Magna Carta, about the rights of lay people to access land for leisure and recreation. Using original songs, the project conceives both singing and walking as political acts of protest and commemoration. Situated within new walking studies, it argues that 10 AQ1 the choir’s walking is embodied and politically ‘artful and wilful.. Drawing on radical walking collectives and practitioners from British psychogeography such as the Loiterers Resistance Movement, Wrights & Sites and Phil Smith , it explores how Magna Carta affected the choir as they connected, through song with the rural spaces where the choir 15 performed. Using a small-scale sample of interviews with choir members, the piece explores the experience of the Magna Carta project. To capture the subjective and reflexive nature of both the action of the protest and the psychogeographical response to space as an output, the article is written using a deliberately creative mélange of lyrics, histories, happenings, symbols and images to offer a ‘thickness of description of Magna Carta as a walking event