PERSONAL INCOME TAXATION: AN EVALUATION OF THE ARGUMENT FOR A PERSONAL EXPENDITURE TAX

Emerald - Tập 5 Số 2 - Trang 3-48 - 1981
T.RITSON FERGUSON1
1Received award for best undergraduate paper in economics at Duke University, 1981.

Tóm tắt

The fundamental problem of designing a wide scope general revenue tax can be reduced to the selection of the base used for administering the tax. Our current personal income tax is a hybrid version of a tax assessed on the basis of a tax unit's annual income receipts. An alternative to an income‐based tax that has received much theoretical treatment but little actual application is an expenditure‐based tax. An expenditure tax (also called a consumption tax or cash flow tax in the context of this paper) differs from an income tax in that it exempts net saving and investment from the tax base. Though the details of a consumption tax design are discussed more fully elsewhere in this paper, the tax base of an expenditure tax is roughly determined by subtracting net savings from gross receipts (including wages, tips, salaries, income from investments, interests, etc.). Withdrawals from savings constitute dissavings and are appropriately included in net savings. The cash flow tax, with wealth transfers deductible to the donor and included in the tax base of the recipient, would be a tax on an individual's standard of living. Similar to the present income tax standard deduction, some universal credit or exemption for a small level of consumption could be allowed.

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Tài liệu tham khảo

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