Lifecycle vs. Annual Perspectives on the Incidence of A Value Added Tax
This paper analyzes the steady state distribution of tax burdens of a Value Added Tax (VAT) in the United States using a lifetime perspective. In contrast to an annual snapshot perspective, I find that a VAT on total expenditures would be proportional over the lifetime. Various modifications to the VAT (zero rating necessities or giving lump sum household rebates) would increase the progressivity of the tax substantially. However, the additional progressivity comes at the cost of substantial tax revenue.
|Date of creation:||Jan 1994|
|Publication status:||published as Tax Policy and the Economy, vol. 8, ed. James M. Poterba, MIT Press, 1994|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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National Bureau of Economic Research, Inc.
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