The Revenue Responsiveness of Consumption Taxes

John Creedy and Norman Gemmell

The Economic Record, 2002, vol. 78, issue 241, 186-194

Abstract: This paper derives analytical expressions for the revenue elasticity of consumption taxes and combined income‐consumption tax systems, analogous to those familiar for income taxes. It provides measures of tax revenue elasticities which can readily be applied in practice. Analytical results suggest that, unlike income taxes, consumption tax revenues are likely to be income‐inelastic in practice, and total income plus consumption tax revenue, though generally elastic, can be expected to decline over time in the absence of counterveiling fiscal reforms. The results also provide some insight into the effects on tax revenue growth (often unintended or unknown) of reforms made with other policy objectives in mind.

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/1475-4932.00022

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:bla:ecorec:v:78:y:2002:i:241:p:186-194

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0249

Access Statistics for this article

The Economic Record is currently edited by Paul Miller, Glenn Otto and Martin Richardson

More articles in The Economic Record from The Economic Society of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().