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Wednesday, April 3, 2013

Viard Presents Progressive Consumption Taxation: The Choice of Tax Design Today at NYU

ViardAlan D. Viard (American Enterprise Institute) presents Progressive Consumption Taxation: The Choice of Tax Design at NYU today as part of its Pathways to Tax Reform Series:

Progressive consumption taxation offers a way to raise revenue in a progressive manner without harming economic growth. This paper provides a comparative evaluation of the two leading proposed progressive consumption taxes, the personal expenditure tax (PET) and the Bradford X tax. One politically appealing and economically reasonable option that has been embraced by a number of previous proposals combines a PET and a business cash flow tax.

http://taxprof.typepad.com/taxprof_blog/2013/04/viard.html

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Comments

Let me point out one problem with the switch to a consumption tax. Every one with some savings will be double taxed. The older you are the worse it is. You paid tax on your income. Now, for example, in retirement you spend your already taxed savings to support those whose current income is untaxed.

It would seem to be that the optimal strategy would be to earn your income in the US and retire abroad. Is this actually behavior the government wants to incentivize?

Also doesn't a "progressive" consumption tax require that you file an income tax return to determine if you are to be helped or hurt by progressivity. Any proposal that has you still filing an income tax return but paying a different tax doesn't sound like a winner.

Posted by: air65cav | Apr 3, 2013 1:47:06 PM