Taxing Consumption and Other Sins

Dados Bibliográficos

ID4029980
AutoresJames R Hines (0000-0001-9389-2957, Richard A. Musgrave Collegiate Professor of Economics, Department of Economics, University of Michigan, Ann Arbor, Michigan, and Research Associate, National Bureau of Economic Research, Cambridge, Massachusetts., autor correspondente)
Ano2007
Volume21
Fascículo1
Páginas49-68
Data de publicação2007-01-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Journal of Economic Perspectives (JOURNAL)
Identificadores do periódicoISSN: 0895-3309 • E-ISSN: 1944-7965
EditoraAmerican Economic Association (PUBLISHER • US)
DOI10.1257/jep.21.1.49
OpenAlexW2101195547
IdiomaEN
Citações recebidas7
Referências citadas14

Federal and state governments in the United States use income and payroll taxes as their primary tools to collect revenue. Relative to the United States, governments in the rest of the world rely much more heavily on taxing consumption. Heavy American reliance on income rather than consumption taxation has not served the U.S. economy well. The inefficiency associated with taxing the return to capital means that the tax system reduces investment in the United States and distorts intertemporal consumption by Americans. While the economic logic of consumption taxation is compelling even for a closed economy, it is even more powerful for an open economy exposed to the world capital market. Consumption taxes in the form of excises can be designed to help protect the environment and control other externalities. Excise taxes can also serve the function of more closely aligning tax burdens with the benefits that taxpayers receive from certain government services. Understandable concerns arise about the distributional consequences of consumption taxation, but a system that relies heavily on consumption taxes, particularly if accompanied by an income tax, can be as progressive as any income tax the United States would realistically want to adopt

Aggregate expenditure · Autonomous consumption · Capital income · Consumer spending · Consumption tax · Economics · Excise · Gross income · Indirect tax · Inefficiency · International taxation · Macroeconomics · Market economy · Payroll · Public economics · State income tax · Tax deferral · Tax reform · Tax revenue · Corporate Taxation and Avoidance · Fiscal Policy and Economic Growth · Taxation and Compliance Studies