A Counter-Reply to Professors Bankman and Weisbach
Chris William Sanchirico
University of Pennsylvania Law School; University of Pennsylvania Wharton School - Business Economics and Public Policy Department
June 20, 2011
Tax Law Review, Vol. 64, No. 4, pp. 551-561, 2011
U of Penn Law School, Public Law Research Paper No. 11-31
U of Penn, Inst for Law & Econ Research Paper No. 11-25
In “A Critical Look at the Economic Argument for Taxing Only Labor Income,” I challenge the tax substitution argument, which according to accepted wisdom fairly establishes that it is best to tax only labor earnings. A portion of Critical Look is directed at Professors Bankman and Weisbach’s application of tax substitution reasoning in two recent articles concerning the choice between income taxation and consumption taxation (which they equate, for purposes of their analysis, to labor-earnings-only taxation). Bankman and Weisbach have now issued a reply to Critical Look. In this counter-reply, I respond to their most important points.
Number of Pages in PDF File: 12
Keywords: Tax Policy, Equity And Efficiency, Optimal Taxation, Tax Substitution Argument, Consumption Tax Versus Income Tax, Atkinson and Stiglitz, Taxes Versus Legal Rules
JEL Classification: K34, D30, D31, D60, D61, D63, H00, H20, H21, J38, K00, K10
Date posted: August 9, 2011 ; Last revised: October 7, 2011
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