Would a Consumption Tax Be Fairer Than an Income Tax?

Tax Reform 1985: The Quest for a Fairer, More Efficient and Simpler Income Tax

Income Tax Buyouts and Income Tax Evasion

A tax buyout is a contract between tax authorities and a tax payer which reduces the marginal income tax rate in exchange for a lump-sum payment. While previous contributions have focussed on labour supply, we consider the interaction with tax evasion and show that a buyout can increase expected tax revenues. This will be the case if (1) the audit probability is constant and the penalty for eva...

How Much Would a Permanent Tax Cut Boost Japanese Consumption?

Papers in a variety of disparate literatures have recently suggested that habit formation in consumption may explain several empirical puzzles, ranging from the level and cyclical variability of the equity premium (Abel (1990, 1999); Constantinides (1990); Jermann (1998);Campbell and Cochrane (1999)) to the ‘excess smoothness’ of aggregate consumption (Fuhrer (2000)) to the apparent fact that i...

Should the Federal Income Tax Be Replaced with a National Sales or Value-added Tax?

[Editor's Note: It appears that the question of changing the federal tax base will be part of the public debate for the foreseeable future. In a Brief that we published in April, Alan Auerbach of UC Berkeley summarized the effects and uncertainties of replacing the federal income tax with a federal flat tax. In the following discussion, Steven Sheffrin of UC Davis reviews several important issu...

Negative Income Tax Plan