R. Glenn Hubbard

How Different Are Income and Consumption Taxes?

Abstract:
It is argued that, with respect to efficiency gains, the distinction between reform toward a broad-based income tax and reform toward a broad-based consumption tax is relatively minor. This is not to say that there are not important efficiency and distributional consequences of moving from the current tax system to a broad-based consumption tax. Most such consequences can be traced to reform of the income tax.

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