Overcoming the Fiscal Trilemma with Two Progressive Consumption Tax Supplements

Laurence Seidman

Public Finance Review, 2013, vol. 41, issue 6, 824-851

Abstract: This article recommends a tax reform strategy that can accomplish three objectives: raise sufficient revenue to deal with long-run budget challenges, promote long-run economic growth, and 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 (VAT) 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)
Date: 2013
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Citations: View citations in EconPapers (2)

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Working Paper: OVERCOMING THE FISCAL TRILEMMA WITH TWO PROGRESSIVE CONSUMPTION TAX SUPPLEMENTS (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:41:y:2013:i:6:p:824-851

DOI: 10.1177/1091142113499396

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