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Satisfying the Principle of Fairness in Consumption Tax

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  • Đorđević Marina

    (University of Niš, Faculty of Economics, Serbia)

Abstract

Consumption taxes have an important place in the tax systems of modern states. They provide a large amount of revenue for the state budget. However, they are generous, but they are very regressive. It is a bad characteristic. The regressivity problem of the tax burden implies that the consumption tax is burdensome for the population with lower income. They pay similar tax rate as people with high income. The aim of this paper is to point to the existence of the problem of regressivity in underdeveloped and developed countries. This paper analyses the possibilities of reducing this problem in order to satisfy the principle of fairness in taxation.

Suggested Citation

  • Đorđević Marina, 2015. "Satisfying the Principle of Fairness in Consumption Tax," Economic Themes, Sciendo, vol. 53(1), pages 37-50, March.
    • Handle: RePEc:vrs:ecothe:v:53:y:2015:i:1:p:37-50:n:3
    DOI: 10.1515/ethemes-2015-0003
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    References listed on IDEAS

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    1. Caspersen, Erik & Metcalf, Gilbert E., 1994. "Is a Value Added Tax Regressive? Annual Versus Lifetime Incidence Measures," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(4), pages 731-746, December.
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