Non-Uniform Consumption Taxes: A 'Blunt Redistributive Instrument'?
This paper examines the question of the extent to which redistribution can be achieved using a structure of consumption taxes differential rates and exemptions. A local measure of progression, that of liability progression (equivalent to the revenue elasticity) is examined. Results are obtained for the Australian indirect tax structure and forms in which only those commodity groups with total expenditure elasticities greater than 1 are taxed. Comparison are also made using equivalent variations, and inequality measures of a money metric welfare measure are reported.
|Date of creation:||2001|
|Date of revision:|
|Note:||This paper has now been published in: Creedy, J. (2001) Indirect Tax Reform and the Role of Exemptions, Fiscal Studies, 22, no.4, pp. 457-486.|
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