TRANSITIONAL ISSUES IN MOVING TO A DIRECT CONSUMPTION TAX

Implementing a Progressive Consumption Tax

Tax Policy Issues in Designing a Carbon Tax

A carbon tax is a promising tool for discouraging the greenhouse gas emissions that cause climate change. In principle, a well-designed tax could reduce the risk of climate change, minimize the cost of emissions reductions, encourage innovation in low-carbon technologies, and raise new public revenue. But designing a real-world carbon tax poses significant challenges. We analyze those challenge...

The Household Expenditure Response to a Consumption Tax Rate Increase

This study measures the effect of an increase in Japan’s Value Added Tax rate on the timing of household expenditures and consumption, which do not necessarily coincide. The analysis finds that durable and storable expenditures surged in the month prior to the tax rate increase, fell sharply upon implementation, but quickly returned to their previous long-run levels. Non-storable non-durable ex...

The Impact of Shifting to a Personal Consumption Tax on

W hat would happen to the pension system if we replaced the federal income tax with a consumption tax? With more than $10 trillion in retirement savings at stake and with the baby boom generation rapidly approaching retirement age, the answer to this question is of considerable importance. In particular, policy makers need to be concerned about the impact that shifting to a consumption tax woul...

On Innation as a Regressive Consumption Tax

Evidence on the portfolio holdings and transaction patterns of households suggests that the burden of innation is not evenly distributed. We build a monetary growth model consistent with key features of cross-sectional household data and use this framework to study the distributional impact of innation. At the aggregate level, our model economy behaves similarly to standard monetary growth mode...