The Effect of Consumption Based Taxes on Agriculture in the United States

Mihaela Marcu and Charles Moss

No 19217, 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Recently several proposals have arisen to replace the current income tax system in the United States with a consumption based or Fair Tax. This study investigates the effect of such a consumption based tax on agricultural investment decisions using stochastic optimal control to model the investment decision at the farm level. The results indicate that a consumption tax rate of 25.9 percent would be equivalent to the income tax rate paid by very large producers in the United States.

Keywords: Public; Economics (search for similar items in EconPapers)
Pages: 18
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea05:19217

DOI: 10.22004/ag.econ.19217

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