Some Macroeconomic Interactions with Tax Base Choice
Posted: 29 May 2003
The article notes that two distinguished and significant literatures have developed over time. The first involves the choice of a tax base, such as a comparison of an accretion tax to a consumption tax. The second involves the impact of taxes on short-run fluctuations and long-term growth. The article attempts to "deepen the cross-fertilization" between the choice of a tax base and the impact of taxes (both in the short-run and the long-term). The article discusses the macroeconomic implications of four different tax bases: an accretion tax, a realization based tax, a cash flow tax, and various hybrid tax systems. The article then summarizes his discussion concluding that further research is necessary using more explicit and sophisticated modeling.
Suggested Citation: Suggested Citation