The Distributive Effect of Expanding the Sales Tax

Lung-Fai Wong, Joel Michael and Doug Wilson
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Lung-Fai Wong: Research Department, Minnesota House of Representatives
Joel Michael: Research Department, Minnesota House of Representatives
Doug Wilson: Research Department, Minnesota House of Representatives

Public Finance Review, 1990, vol. 18, issue 4, 465-479

Abstract: This article examines the distributive effect of expanding the Minnesota sales tax Abstract base to include additional consumption items. Two indexes, Kakwani and the Suits, are calculated for the existing sales tax base and expansion options. The indexes consistently indicate that the existing tax base is regressive, as are the major base expansion items. Effective tax rates indicate that expanding the sales tax will widen the burden gap between low-income and high-income taxpayers. The aggregate property of the Kakwani and Suits indexes is used to examine the overall distributive effect of sales tax and other tax systems.

Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:18:y:1990:i:4:p:465-479

DOI: 10.1177/109114219001800406

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