IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v51y1998i2p303-24.html
   My bibliography  Save this article

Estimating Flat Tax Incidence and Yield: A Sensitivity Analysis

Author

Listed:
  • Dunbar, Amy
  • Pogue, Thomas F.

Abstract

This research estimates the distributional effects of replacing existing federal income taxes with a flat tax as proposed by Representative Richard Armey and Senator Richard Shelby. Different assumptions about tax incidence and how the flat tax would be implemented yield somewhat different estimates of the distribution of gains and losses. Nevertheless, our main conclusions appear to be quite robust. Switching to the proposed flat tax would increase the tax burdens of a majority of taxpayers and would significantly redistribute tax burdens, mainly from the top decile to other taxpayers. This pattern of redistribution persists, although the top decile’s gains are lessened, even if the flat tax is modified to make it more progressive.

Suggested Citation

  • Dunbar, Amy & Pogue, Thomas F., 1998. "Estimating Flat Tax Incidence and Yield: A Sensitivity Analysis," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(2), pages 303-324, June.
    • Handle: RePEc:ntj:journl:v:51:y:1998:i:2:p:303-24
    DOI: 10.1086/NTJ41789328
    as

    Download full text from publisher

    File URL: https://doi.org/10.1086/NTJ41789328
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://doi.org/10.1086/NTJ41789328
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.1086/NTJ41789328?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James M. Poterba (ed.), 1997. "Tax Policy and the Economy, Volume 11," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661047, April.
    2. Lucas, Robert E, Jr, 1990. "Supply-Side Economics: An Analytical Review," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 293-316, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Clemens Fuest & Andreas Peichl & Thilo Schaefer, 2008. "Is a flat tax reform feasible in a grown-up democracy of Western Europe? A simulation study for Germany," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(5), pages 620-636, October.
    2. repec:kap:iaecre:v:14:y:2008:i:4:p:460-471 is not listed on IDEAS
    3. Schaefer, Thilo & Peichl, Andreas & Fuest, Clemens, 2007. "Is a Flat Tax politically feasible in a grown-up Welfare State?," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 07-6, University of Cologne, FiFo Institute for Public Economics.
    4. Andreas PEICHL, 2008. "The Benefits of Linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," EcoMod2008 23800106, EcoMod.
    5. Andreas Peichl, 2009. "The Benefits and Problems of Linking Micro and Macro Models — Evidence from a Flat Tax Analysis," Journal of Applied Economics, Taylor & Francis Journals, vol. 12(2), pages 301-329, November.
    6. Cristián Mardones P., 2014. "Complementarity between flat tax and conditional cash transfers to improve the income distribution in Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 17(3), pages 04-27, December.
    7. Paul Bachman & Jonathan Haughton & Laurence J. Kotlikoff & Alfonso Sanchez-Penalver & David G. Tuerck, 2006. "Taxing Sales Under the FairTax: What Rate Works?," NBER Working Papers 12732, National Bureau of Economic Research, Inc.
    8. Paulus, Alari & Peichl, Andreas, 2008. "Effects of flat tax reforms in Western Europe on equity and efficiency," ISER Working Paper Series 2008-06, Institute for Social and Economic Research.
    9. Sergio Galletta & Agustin Redonda, 2017. "Corporate flat tax reforms and businesses’ investment decisions: evidence from Switzerland," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(6), pages 962-996, December.
    10. Fuest, Clemens & Peichl, Andreas & Schaefer, Thilo, 2007. "Is a Flat Tax Feasible in a Grown-up Welfare State?," IZA Discussion Papers 3142, Institute of Labor Economics (IZA).
    11. Deena Skipper & Hughlene Burton, 2008. "Ramifications of a Flat Tax—Shifting the Burden to the Middle Class," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(4), pages 460-471, November.
    12. Calegari, Michael, 1998. "Flat Taxes and Effective Tax Planning," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(4), pages 689-713, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. George R. Zodrow, 2019. "Should Capital Income Be Subject to Consumption-Based Taxation?," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 5, pages 131-168, World Scientific Publishing Co. Pte. Ltd..
    2. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    3. Vasilev, Aleksandar, 2015. "Welfare gains from the adoption of proportional taxation in a general-equilibrium model with a grey economy: the case of Bulgaria's 2008 flat tax reform," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 48(2), pages 169-185.
    4. Röhrs, Sigrid & Winter, Christoph, 2017. "Reducing government debt in the presence of inequality," Journal of Economic Dynamics and Control, Elsevier, vol. 82(C), pages 1-20.
    5. Lin, Shuanglin, 2008. "China's value-added tax reform, capital accumulation, and welfare implications," China Economic Review, Elsevier, vol. 19(2), pages 197-214, June.
    6. Espino, Emilio & González Rozada, Martín, 2013. "Normative Fiscal Policy and Growth: Some Quantitative Implications for the Chilean Economy," IDB Publications (Working Papers) 4648, Inter-American Development Bank.
    7. Alfò, Marco & Carbonari, Lorenzo & Trovato, Giovanni, 2023. "On the effects of taxation on growth: an empirical assessment," Macroeconomic Dynamics, Cambridge University Press, vol. 27(5), pages 1289-1318, July.
    8. Buiter, Willem H., 1996. "Aspects of Fiscal Performance in some Transition Economies under Fund-supported Programs," CEPR Discussion Papers 1535, C.E.P.R. Discussion Papers.
    9. Schünemann, Johannes & Trimborn, Timo, 2023. "Boosting taxes for boasting about houses? Status concerns in the housing market," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 120-143.
    10. Gustavo Marrero, 2010. "Tax-mix, public spending composition and growth," Journal of Economics, Springer, vol. 99(1), pages 29-51, February.
    11. repec:kap:iaecre:v:14:y:2008:i:4:p:460-471 is not listed on IDEAS
    12. Freddy Heylen & Renaat Van de Kerckhove, 2014. "Heterogeneous ability and the effects of fiscal policy on employment, income and welfare in general equilibrium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 14/898, Ghent University, Faculty of Economics and Business Administration.
    13. Ian W.H. Parry, 2005. "Fiscal Interactions and the Costs of Controlling Pollution from Electricity," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 849-869, Winter.
    14. Andrew Mitrusi & James Poterba, 2000. "The Distribution of Payroll and Income Tax Burdens, 1979-1999," NBER Working Papers 7707, National Bureau of Economic Research, Inc.
    15. Thomas I. Renström & Luca Spataro, 2021. "Optimal taxation in an endogenous growth model with variable population and public expenditure," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(4), pages 639-659, August.
    16. Huffman, Gregory W., 1996. "Endogenous tax determination and the distribution of wealth," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 45(1), pages 207-242, December.
    17. Echevarría Olave, Cruz Ángel & Iza Padilla, María Amaya, 2005. "Life Expectancy, Human Capital, Social Security and Growth," DFAEII Working Papers 1988-088X, University of the Basque Country - Department of Foundations of Economic Analysis II.
    18. Nicolini, Juan Pablo, 1998. "Tax evasion and the optimal inflation tax," Journal of Development Economics, Elsevier, vol. 55(1), pages 215-232, February.
    19. Jiang Wei, 2019. "Optimal taxation under equilibrium unemployment and economic profits," The B.E. Journal of Macroeconomics, De Gruyter, vol. 19(1), pages 1-21, January.
    20. Lars Kunze, 2009. "Capital Taxation, Long-run Growth, and Bequests," Ruhr Economic Papers 0113, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    21. Stiglitz, Joseph E., 2018. "Pareto efficient taxation and expenditures: Pre- and re-distribution," Journal of Public Economics, Elsevier, vol. 162(C), pages 101-119.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:51:y:1998:i:2:p:303-24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The University of Chicago Press (email available below). General contact details of provider: https://www.ntanet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.