Starting Over: The Automated Payment Transaction Tax

Edgar Feige

MPRA Paper from University Library of Munich, Germany

Abstract: This paper proposes a 21st century global fiscal architecture to replace the present system of personal and corporate income, sales, excise, capital gains, import and export duties, gift and estate taxes with a single comprehensive revenue neutral Automated Payment Transaction (APT) tax. In its simplest form, the APT tax consists of a flat tax levied on all transactions. The tax is automatically assessed and collected when transactions are settled through the electronic technology of the banking/ payments system. The APT tax introduces progressivity through the tax base rather than via the rate structure. Since roughly 85% of all transactions involve the exchange of financial instruments, it is the wealthy who carry out a disproportionate share of total transactions and therefore bear a disproportionate burden of the tax despite its flat rate structure. The automated recording of all APT tax payments by firms and individuals creates a degree of transparency and perceived fairness that induces greater tax compliance. Also, the tax has lower administrative and compliance cost. Like all taxes, the APT tax creates new distortions whose costs must be weighted against the benefits obtained by replacing the current tax system.

Keywords: APT tax; transaction tax; Tobin Tax; Security Transaction tax; debit tax; global achitecture; tax reform; flat tax (search for similar items in EconPapers)
JEL-codes: A10 D23 D31 D63 E26 E44 E62 G28 H21 H26 H87 (search for similar items in EconPapers)
Date: 2001-03
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/11533/1/MPRA_paper_11533.pdf original version (application/pdf)

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:pra:mprapa:11533

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().