Implementing a Progressive Consumption Tax: Advantages of Adopting the VAT Credit-Method System

National Tax Journal, Vol. 59, 2006

Georgetown University Law Center, Scholarship @ Georgetown law, 2006

27 Pages Posted: 17 Aug 2016

See all articles by Itai Grinberg

Itai Grinberg

Georgetown University Law Center

Date Written: 2006

Abstract

A credit–method value – added tax, a payroll tax, and a business – level wage subsidy can approximate the economic and distributional consequences of a subtraction – method X – tax. Such a credit – method progressive consumption tax has administrative advantages as compared to a subtraction – method progressive consumption tax, once certain political factors are taken into account. Further, unlike a subtraction – method system, a credit – method progressive consumption tax could easily interact with other tax systems around the world and comply with World Trade Organization rules without sacrificing best practice VAT design features that allow for effective enforcement.

JEL Classification: K34

Suggested Citation

Grinberg, Itai, Implementing a Progressive Consumption Tax: Advantages of Adopting the VAT Credit-Method System (2006). National Tax Journal, Vol. 59, 2006, Georgetown University Law Center, Scholarship @ Georgetown law, 2006, Available at SSRN: https://ssrn.com/abstract=2824444

Itai Grinberg (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue NW
Washington, DC 20001
United States
202-661-6615 (Phone)

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