The superiority of an ideal consumption tax over an ideal income tax /

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Bibliographic Details
Author / Creator:	Bankman, Joseph, 1955- author.
Imprint:	[Chicago, Illinois] : Law School, University of Chicago, 2005.
Description:	1 online resource (82 pages)
Language:	English
Series:	John M. Olin Law & Economics Working Paper ; no. 251(2d series) John M. Olin Program in Law & Economics working paper ; 2nd ser., no. 251.
Subject:	Taxation. Income tax. Spendings tax. Income distribution. Income distribution. Income tax. Spendings tax. Taxation.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/8891790

Hidden Bibliographic Details
Other authors / contributors:	Weisbach, David A., author.
Notes:	"July 2005." Includes bibliographical references. Title from online title page (viewed August 28, 2012).
Summary:	"This paper considers the arguments regarding the choice between an ideal income tax and an ideal consumption tax, focusing on an argument made by Atkinson and Stiglitz regarding neutral taxation of commodities. The argument shows that a properly designed consumption tax is Pareto superior to an income tax: it is more efficient and at least as good at redistribution. The major exception to the Atkinson and Stiglitz result is if individuals with equal wages have different propensities to save. In that event, a consumption tax may no longer be Pareto superior to an income tax. A consumption tax will continue, however, to be more desirable than an income tax. It will be strictly more efficient than an income tax, and under reasonable assumptions, better at redistributing from those who are better off to those who are worse off. This result holds true even if one heavily weights the welfare of the poor."

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