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Non-Uniform Consumption Taxes: A 'Blunt Redistributive Instrument'?

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  • Creedy, J.

Abstract

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.

Suggested Citation

  • Creedy, J., 2001. "Non-Uniform Consumption Taxes: A 'Blunt Redistributive Instrument'?," Department of Economics - Working Papers Series 785, The University of Melbourne.
  • Handle: RePEc:mlb:wpaper:785 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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    File URL: http://www.economics.unimelb.edu.au/research/2000-2001.html
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    Cited by:

    1. Essama-Nssah, B., 2008. "Assessing the redistributive effect of fiscal policy," Policy Research Working Paper Series 4592, The World Bank.

    More about this item

    Keywords

    CONSUMPTION ; TAXES ; MONEY;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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