The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Consumption Taxation

  • James M. Poterba
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_278

Abstract

Whether to tax households based on their income or on their consumption is one of the central and long-standing questions of tax design. Most developed nations rely on a combination of income and consumption taxes to raise revenue. The debate over alternative tax bases involves both philosophical arguments about what constitutes a fair measure of ability to pay and economic arguments about the relative efficiency of different tax bases. Consumption taxes can be implemented in a variety of ways, including value added taxes, retail sales taxes, and savings-exempt income taxes.

Keywords

Capital gains taxation Consumption taxation Distortionary taxation Flat rate tax Individual Retirement Accounts (USA) Progressive and regressive taxation Redistribution Retail sales tax Savings-Exempt income tax Tax compliance Taxation of income Value added tax 

JEL Classifications

H2 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • James M. Poterba
    • 1
  1. 1.