IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v52y1999i3p443-58.html
   My bibliography  Save this article

The Required Tax Rate in a National Retail Sales Tax

Author

Listed:
  • Gale, William G.

Abstract

This paper examines the required tax rate in a national retail sales tax (NRST). I show that recent proposals, such as one to replace virtually all federal revenues with a 23 percent tax-inclusive NRST, are based on assumptions that real government spending would decline by $480 billion per year and that there would be no tax avoidance, evasion, or political erosion of the tax base in an NRST. Correcting for these assumptions indicates that the required tax-inclusive rate would be over 50 percent and the required tax-exclusive rate would be over 100 percent.

Suggested Citation

  • Gale, William G., 1999. "The Required Tax Rate in a National Retail Sales Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(3), pages 443-458, September.
    • Handle: RePEc:ntj:journl:v:52:y:1999:i:3:p:443-58
    DOI: 10.1086/NTJ41789734
    as

    Download full text from publisher

    File URL: https://doi.org/10.1086/NTJ41789734
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://doi.org/10.1086/NTJ41789734
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.1086/NTJ41789734?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. Charles E. Mclure, 1987. "The Value-Added Tax: Key to Deficit Reduction?," Books, American Enterprise Institute, number 725195, September.
    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. Gary C. Cornia & Scott Grimshaw & Ray Nelson & Lawrence Walters, 2010. "The Effect of Local Option Sales Taxes on Local Sales," Public Finance Review, , vol. 38(6), pages 659-681, November.
    2. Gale, William G., 1999. "The Required Tax Rate in a National Retail Sales Tax," National Tax Journal, National Tax Association, vol. 52(n. 3), pages 443-58, September.
    3. Alan D. Viard, 2000. "The transition to consumption taxation, part 1: the impact on existing capital," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q3, pages 2-22.

    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. Charles E. McLure Jr. & George R. Zodrow, 2019. "A Hybrid Consumption-Based Direct Tax Proposed for Bolivia," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 6, pages 169-193, World Scientific Publishing Co. Pte. Ltd..
    2. Haufler, Andreas, 1994. "Unilateral tax reform under the restricted origin principle," European Journal of Political Economy, Elsevier, vol. 10(3), pages 511-527, October.
    3. David F. Bradford, 2003. "The X Tax in the World Economy," Working Papers 109, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Michael Keen, 1997. "Peculiar institutions: A British perspective on tax policy in the United States," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 371-400, November.
    5. Laurence Seidman, 2013. "Overcoming the Fiscal Trilemma with Two Progressive Consumption Tax Supplements," Public Finance Review, , vol. 41(6), pages 824-851, November.
    6. Hana Zídková & Aneta Šťastná, 2019. "VAT Collection Methods," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(3), pages 883-895.
    7. John W. Diamond & George R. Zodrow, 2013. "Promoting Growth, Maintaining Progressivity, and Dealing with the Fiscal Crisis," Public Finance Review, , vol. 41(6), pages 852-884, November.
    8. Gilbert E. Metcalf, 1995. "Value-Added Taxation: A Tax Whose Time Has Come?," Journal of Economic Perspectives, American Economic Association, vol. 9(1), pages 121-140, Winter.
    9. McLure, Charles E. Jr., 1997. "Electronic Commerce, State Sales Taxation, and Intergovernmental Fiscal Relations," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(4), pages 731-749, December.
    10. Martin S. Feldstein & Paul R. Krugman, 1990. "International Trade Effects of Value-Added Taxation," NBER Chapters, in: Taxation in the Global Economy, pages 263-282, National Bureau of Economic Research, Inc.
    11. Gale, William G., 1999. "The Required Tax Rate in a National Retail Sales Tax," National Tax Journal, National Tax Association, vol. 52(n. 3), pages 443-58, September.
    12. McLure, Charles E, 1996. "The US debate on comsuption-based taxes: implication for the Americas," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 34292, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    13. Bradford, David F, 2003. "Addressing the Transfer-Pricing Problem in an Origin-Basis X Tax," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(5), pages 591-610, September.
    14. Sijbren Cnossen, 1998. "Global Trends and Issues in Value Added Taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(3), pages 399-428, July.
    15. McLure, Charles E. Jr., 1997. "Electronic Commerce, State Sales Taxation, and Intergovernmental Fiscal Relations," National Tax Journal, National Tax Association, vol. 50(4), pages 731-49, December.
    16. Michael Keen, 1997. "Peculiar institutions: A British perspective on tax policy in the United States," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 371-400, November.
    17. Charles McLure, 2000. "Implementing Subnational Value Added Taxes on Internal Trade: The Compensating VAT (CVAT)," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(6), pages 723-740, December.
    18. repec:pri:cepsud:93bradford is not listed on IDEAS
    19. Michael Smart, 1997. "On the efficiency of uniform taxation in a many-consumer economy," Working Papers msmart-97-01, University of Toronto, Department of Economics.
    20. 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..
    21. Toh, Mun-Heng & Lin, Qian, 2005. "An evaluation of the 1994 tax reform in China using a general equilibrium model," China Economic Review, Elsevier, vol. 16(3), pages 246-270.

    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:52:y:1999:i:3:p:443-58. 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.