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Income versus Consumption Tax Baselines for Tax Expenditures

In: Economic Analysis of Tax Expenditures

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  • Robert Carroll
  • David Joulfaian
  • James Mackie

Abstract

This paper explores the implications of evaluating income tax preferences, or tax expenditures, under a consumption tax baseline. More specifically, it examines the conceptual differences between income and consumption tax baselines, and employs an X-tax prototype of a consumption tax to gauge the sensitivity of estimates to the two baselines. The tax expenditure estimates for capital income preferences are vastly different under the two regimes.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Robert Carroll & David Joulfaian & James Mackie, 2008. "Income versus Consumption Tax Baselines for Tax Expenditures," NBER Chapters, in: Economic Analysis of Tax Expenditures, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:13140
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    References listed on IDEAS

    as
    1. Harry Grubert & T. Scott Newlon, 1997. "Taxing Consumption in a Global Economy," Books, American Enterprise Institute, number 52737, September.
    2. Poddar, Satya & English, Morley, 1997. "Taxation of Financial Services Under a Value-Added Tax: Applying the Cash-Flow Approach," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(1), pages 89-111, March.
    3. Davie, Bruce F., 1994. "Tax Expenditures in the Federal Excise Tax System," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(1), pages 39-62, March.
    4. Davie, Bruce F., 1994. "Tax Expenditures in the Federal Excise Tax System," National Tax Journal, National Tax Association, vol. 47(1), pages 39-62, March.
    5. Poddar, Satya & English, Morley, 1997. "Taxation of Financial Services Under a Value-Added Tax: Applying the Cash-Flow Approach," National Tax Journal, National Tax Association, vol. 50(1), pages 89-111, March.
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    Cited by:

    1. Gerasimos T. Soldatos, 2021. "In/Estabilidad bajo el impuesto sobre la renta ideal y el impuesto sobre el consumo ideal," Cuadernos de Economía - Spanish Journal of Economics and Finance, Asociación Cuadernos de Economía, vol. 44(124), pages 33-42, Enero.
    2. Rosanne Altshuler & Robert D. Dietz, 2008. "Tax Expenditure Estimation and Reporting: A Critical Review," NBER Working Papers 14263, National Bureau of Economic Research, Inc.
    3. Salvador Barrios & Flavia Coda Moscarola & Francesco Figari & Luca Gandullia, 2020. "Size and distributional pattern of pension-related tax expenditures in European countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(5), pages 1287-1320, October.
    4. Rosanne Altshuler & Robert Dietz, 2008. "Reconsidering Tax Expenditure Estimation: Challenges And Reforms," Departmental Working Papers 200804, Rutgers University, Department of Economics.

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