Consumption Taxes and the Theory of General and Individual Taxation

Abstract:     
This article offers both an economic and philosophical analysis of modern consumption tax proposals such as the Flat Tax. It demonstrates that, given firm behavior, the proposals are likely to deviate substantially from individual taxation, which can be defined as taxing individuals for the value of what they consume. Although the proposals deviate from individual taxation, the philosophical underpinnings of consumption tax theory rest on individual taxation. The article concludes that if non-consequentialist and weighted welfarists theories of consumption taxation are important, one should choose other methods of implementing a consumption tax. If the design of the modern proposals is important, however, one should acknowledge that the proposals would tax consumption solely to promote overall economic growth.

Number of Pages in PDF File: 69

Accepted Paper Series