Generalized Cash Flow Taxation
AbstractWe show the unique form that must be taken by a tax system based entirely on realization accounting to implement a uniform capital income tax, or, equivalently, a uniform wealth tax. This system combines elements of an accrual based capital income tax and a traditional cash flow tax, having many of the attributes of the latter while still imposing a tax burden on marginal capital income. Like the traditional cash flow tax, this system may be integrated with a tax on labor income. We also show how such a tax can be supplemented with an optional accounting for a segregated subset of actively traded securities, subjected separately to mark-to-market taxation at the uniform capital income tax rate, to permit a fully graduated tax system applicable to labor income.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8122.
Date of creation: Feb 2001
Date of revision:
Publication status: published as Auerbach, Alan J. and David F. Bradford. "Generalized Cash-Flow Taxation," Journal of Public Economics, 2004, v88(5,Apr), 957-980.
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Other versions of this item:
- Alan J. Auerbach & David F. Bradford, 2001. "Generalized Cash Flow Taxation," Working Papers 131, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Alan Auerbach & David Bradford, 2001. "Generalized Cash Flow Taxation," CESifo Working Paper Series 425, CESifo Group Munich.
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-02-14 (All new papers)
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