OVERCOMING THE FISCAL TRILEMMA WITH TWO PROGRESSIVE CONSUMPTION TAX SUPPLEMENTS

Laurence Seidman

No 14-04, Working Papers from University of Delaware, Department of Economics

Abstract: This article recommends a tax reform strategy that can accomplish three objectives: (1) raise sufficient revenue to deal with long run budget challenges; (2) promote long run economic growth; (3) provide progressivity in the face of increasing inequality. The strategy for overcoming this fiscal trilemma is to retain (with modification) the personal income tax, the corporate income tax, and the payroll tax, and add two progressive consumption tax supplements: a value added tax made progressive by a refundable VAT credit on the 1040, and a progressive consumption surtax on the 1040.

Keywords: Tax reform; Progressive consumption tax supplements (search for similar items in EconPapers)
JEL-codes: H20 H24 H25 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2014
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Related works:
Journal Article: Overcoming the Fiscal Trilemma with Two Progressive Consumption Tax Supplements (2013)
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