Tax Policy under a Hybrid Income-Consumption Tax
74 Pages Posted: 20 Oct 2020
Date Written: January 01, 1992
Abstract
The U.S. federal tax system is undoubtedly a hybrid income-consumption tax system, but scholars have yet to map out the normative aspirations of the system. This Article does just that, demonstrating that the U.S. tax system embodies normative desires to advance individual welfare, macroeconomic welfare, and general equity. Moreover, although income and consumption tax extremes are appealing, a hybrid income-consumption system effects the most favorable net impact. After using efficiency, merit-good, and equity justifications to analyze different savings categories—life cycle, precautionary, and bequest savings—this Article suggests three variations of hybrid systems, along with avenues for further exploration.
Note: Copyright for this piece is held by Texas Law Review; paper is published to SSRN with permission of Tex. L. Rev.
Keywords: income tax, tax, reform, inequality
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