Lifecycle vs. Annual Perspectives on the Incidence of A Value Added Tax
AbstractThis paper analyzes the steady state distribution of tax burdens of a Value Added Tax (VAT) in the United States using a lifetime perspective. In contrast to an annual snapshot perspective, I find that a VAT on total expenditures would be proportional over the lifetime. Various modifications to the VAT (zero rating necessities or giving lump sum household rebates) would increase the progressivity of the tax substantially. However, the additional progressivity comes at the cost of substantial tax revenue.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4619.
Date of creation: Jan 1994
Date of revision:
Publication status: published as Tax Policy and the Economy, vol. 8, ed. James M. Poterba, MIT Press, 1994
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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