Measuring Aggregate Business Income With Tax Data

James Pearce

National Tax Journal, 2015, vol. 68, issue 4, 1025-1046

Abstract: Tax reform proposals, such as taxing all business entities in a similar manner under an entity level tax or moving to a cash-flow or valued-added consumption tax, require careful accounting so that estimates of the revenue impacts and distributional consequences are consistent across proposals. This paper constructs a broadly consistent measure of tax-based business income and details the correspondence between it and National Income and Product Accounts (NIPA) business income. The paper highlights the importance of addressing the double-counting of partnership income in tax data and the importance of investment income in explaining the differences between tax-based business income and NIPA business income.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:68:y:2015:i:4:p:1025-1046

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