Financial Services under a Consumption Tax: Grubert and Mackie (2000) Revisited

David A. Weisbach

National Tax Journal, 2019, vol. 72, issue 1, 237-250

Abstract: This paper reviews Harry Grubert's contributions to the theory of consumption taxation, focusing on Grubert and Mackie (2000). Grubert and Mackie argue that financial services are not consumption and, therefore, need not be a direct part of the consumption tax base. Instead, financial services are like machines that transform resources over time or states of nature and, therefore, should be taxed like other machines in a consumption tax. The paper argues that Grubert and Mackie's theory is correct under the key assumption that the output of financial services (such as a higher level of consumption at a given time or state of nature) is taxed. If the output is not taxed, financial services should be taxed in the same way that durable goods are taxed.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.17310/ntj.2019.1.09 (text/html)
Access is restricted to subscribers and members of the National Tax Association.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:72:y:2019:i:1:p:237-250

Access Statistics for this article

National Tax Journal is currently edited by Stacy Dickert-Conlin and William M. Gentry

More articles in National Tax Journal from National Tax Association, National Tax Journal Contact information at EDIRC.
Bibliographic data for series maintained by The University of Chicago Press ().