National Bureau of Economic Research · 1993 · 18 citations · 0 references
Public AffairsEconomicsPublic FinanceTax PolicyTaxationValue-added TaxCapital Tax IncidenceEconomic IncidenceStatutory IncidenceTax EfficiencyTax ReformValue Added Tax LawAnnual IncidenceLifetime IncidenceLifetime Tax IncidenceProgressive Tax IncidenceTax Progression Metrics
We measure the lifetime incidence of a value added tax (V AT) using income data from the Panel Study of Income Dynamics (PSID) and consumption data from the Consumer Expenditure Survey (CEX). When annual income is used as a measure of economic well-being, a VAT looks quite regressive. However, the results change significantly when the analysis is done using lifetime income. Using two different measures of lifetime income, we find that a VAT in the United States would be proportional to slightly progressive over the lifetime.