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Should Financial Services Be Taxed Under a Consumption Tax? Probably

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  • Rousslang, Donald J.

Abstract

Previous authors have concluded that a broad-based consumption tax would be more efficient if financial services to consumers, such as services for investment, loans and insurance, were exempted from the tax, even if taxing the financial services posed no special administrative burden. I argue, however, that this conclusion rests on some key assumptions and that alternative, equally plausible assumptions support the conclusion that, absent any special administrative burden, the tax rate on financial services to consumers should be at least as high as the tax rate on consumer goods.

Suggested Citation

  • Rousslang, Donald J., 2002. "Should Financial Services Be Taxed Under a Consumption Tax? Probably," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(2), pages 281-291, June.
  • Handle: RePEc:ntj:journl:v:55:y:2002:i:2:p:281-291
    DOI: 10.17310/ntj.2002.2.05
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    References listed on IDEAS

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    1. Jack, William, 2000. "The Treatment of Financial Services Under a Broad-Based Consumption Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 841-852, December.
    2. Jack, William, 2000. "The Treatment of Financial Services under a Broad-Based Consumption Tax," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 841-52, December.
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    Cited by:

    1. Arkadiusz Bernal, 2012. "Zasadność zwolnienia usług pośrednictwa finansowego z podatku od wartości dodanej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1-2, pages 117-133.

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