Short-run Distributional Effects of VAT Rate Change: Evidence from a consumption tax rate increase in Japan
Households will purchase more items than usual prior to a value added tax (VAT) rate increase in order to avoid taxation. Since this type of arbitrage requires resources such as shopping time and storage space, the impacts of tax increases vary across households, which has brought distributional effects in the short-run. Using the case of a consumption tax rate increase in Japan in 1997, we show that households who are non-working, with non-working spouses and residing in larger houses, benefited from more arbitrage. To minimize short-run economic disturbances, step-by-step increases would be useful.
|Date of creation:||May 2012|
|Date of revision:|
|Contact details of provider:|| Postal: 11th floor, Annex, Ministry of Economy, Trade and Industry (METI) 1-3-1, Kasumigaseki Chiyoda-ku, Tokyo, 100-8901|
Web page: http://www.rieti.go.jp/
More information through EDIRC
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.:
- Mertens, Karel & Ravn, Morten O, 2009.
"Empirical Evidence on the Aggregate Effects of Anticipated and Unanticipated U.S. Tax Policy Shocks,"
CEPR Discussion Papers
7370, C.E.P.R. Discussion Papers.
- Karel Mertens & Morten O. Ravn, 2012. "Empirical Evidence on the Aggregate Effects of Anticipated and Unanticipated US Tax Policy Shocks," American Economic Journal: Economic Policy, American Economic Association, vol. 4(2), pages 145-81, May.
- Karel Mertens & Morten Ravn, 2010. "Empirical Evidence on the Aggregate Effects of Anticipated and Unanticipated U.S. Tax Policy Shocks," NBER Working Papers 16289, National Bureau of Economic Research, Inc.
- Karel Mertens & Morten O. Ravn, 2009. "Empirical evidence on the aggregate effects of anticipated and unanticipated US tax policy shocks," Working Paper Research 181, National Bank of Belgium.
- Thomas Crossley & Hamish Low & Matthew Wakefield, 2009.
"The economics of a temporary VAT cut,"
IFS Working Papers
W09/02, Institute for Fiscal Studies.
- Christopher House & Matthew D. Shapiro, 2006.
"Temporary Investment Tax Incentives: Theory with Evidence from Bonus Depreciation,"
NBER Working Papers
12514, National Bureau of Economic Research, Inc.
- Christopher L. House & Matthew D. Shapiro, 2008. "Temporary Investment Tax Incentives: Theory with Evidence from Bonus Depreciation," American Economic Review, American Economic Association, vol. 98(3), pages 737-68, June.
- Horioka, Charles Yuji, 1990.
"Why is Japan's household saving rate so high? A literature survey,"
Journal of the Japanese and International Economies,
Elsevier, vol. 4(1), pages 49-92, March.
- Yuji Horioka, Charles, 0. "Why is Japan's Household Saving Rate So High? A Literature Survey," CEPR Publications, Stanford University, Center for Economic Policy Research.
- David CASHIN & UNAYAMA Takashi, 2011. "The Intertemporal Substitution and Income Effects of a VAT Rate Increase: Evidence from Japan," Discussion papers 11045, Research Institute of Economy, Trade and Industry (RIETI).
- Melvin Stephens & Takashi Unayama, 2011.
"The Consumption Response to Seasonal Income: Evidence from Japanese Public Pension Benefits,"
American Economic Journal: Applied Economics,
American Economic Association, vol. 3(4), pages 86-118, October.
- Melvin Stephens, Jr. & Takashi Unayama, 2010. "The Consumption Response to Seasonal Income: Evidence from Japanese Public Pension Benefits," NBER Working Papers 16342, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:12029. 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: (NUKATANI Sorahiko)
If references are entirely missing, you can add them using this form.