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The Distributional Effects of a Sales Tax on Services


  • Siegfried, John J.
  • Smith, Paul A.


The ultimate burden of a sales tax on intermediate products is traces to final consumers through input-output relationships. The main effect of accounting for the burden of taxes levied on intermediate products is to move the overall distributional effect of a sales tax more toward proportionality, because the wide variety of uses for most intermediate products spreads the impact of a tax on them throughout the economy so that it affects consumers with different incomes proportionately.

Suggested Citation

  • Siegfried, John J. & Smith, Paul A., 1991. "The Distributional Effects of a Sales Tax on Services," National Tax Journal, National Tax Association, vol. 44(1), pages 41-53, March.
  • Handle: RePEc:ntj:journl:v:44:y:1991:i:1:p:41-53

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    References listed on IDEAS

    1. Bird, Richard M., 1987. "A new look at indirect taxation in developing countries," World Development, Elsevier, vol. 15(9), pages 1151-1161, September.
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    Cited by:

    1. Derrick, Frederick W. & Scott, Charles E., 1998. "Sales tax equity: Who bears the burden?," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(2), pages 227-237.

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