Indirect tax reform and the role of exemptions
This paper examines the question of whether indirect tax rates should be uniform, using four different modelling strategies. First, marginal tax reform is examined. This is concerned with the optimal direction of small changes in effective indirect tax rates and requires considerably less information than the calculation of optimal rates. Second, the welfare effects of a partial shift from the current indirect tax system in Australia towards a goods and services tax (GST) are considered, with particular emphasis on differences between household types and the role of exemptions. Third, in view of the stress on a distributional role for exemptions of certain goods from a GST, the potential limits to such redistribution are considered. The fourth approach examines the extent of horizontal inequity and reranking that can arise when there are non-uniform tax rates. These inequities arise essentially because of preference heterogeneity.
Volume (Year): 22 (2001)
Issue (Month): 4 (December)
|Contact details of provider:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Web page: http://www.ifs.org.uk
More information through EDIRC
|Order Information:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- King, Mervyn A., 1983. "Welfare analysis of tax reforms using household data," Journal of Public Economics, Elsevier, vol. 21(2), pages 183-214, July.
- Creedy, John, 1998.
"Measuring the Welfare Effects of Price Changes: A Convenient Parametric Approach,"
Australian Economic Papers,
Wiley Blackwell, vol. 37(2), pages 137-51, June.
- Creedy, J., 1996. "Measuring the Welfare Effects of Price Changes: A Convenient Parametric Approach," Department of Economics - Working Papers Series 536, The University of Melbourne.
- Creedy, J., 1998. "Differential Consumption Taxes and Equity: The Limits to Redistribution," Department of Economics - Working Papers Series 648, The University of Melbourne.
- Blackorby, Charles & Donaldson, David, 1988. "Money metric utility: A harmless normalization?," Journal of Economic Theory, Elsevier, vol. 46(1), pages 120-129, October.
- Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, vol. 25(3), pages 259-298, December.
- Banks, James & Blundell, Richard & Lewbel, Arthur, 1996.
"Tax Reform and Welfare Measurement: Do We Need Demand System Estimation?,"
Royal Economic Society, vol. 106(438), pages 1227-41, September.
- James Banks & Richard Blundell & Arthur Lewbel, 1994. "Tax reform and welfare measurement: do we need demand system estimation?," IFS Working Papers W94/11, Institute for Fiscal Studies.
- Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
When requesting a correction, please mention this item's handle: RePEc:ifs:fistud:v:22:y:2001:i:4:p:457-486.. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Emma Hyman)
If references are entirely missing, you can add them using this form.