A Review of Studies on the Distributional Impact of Consumption Taxes in OECD Countries Neil Warren

User activity

Share to:
View the summary of this work
Neil Warren
Work-life balance; Economic policy
Consumption taxes are only rarely assessed for their impact on the economic well-being of individuals. This paper reviews various studies on this issue. It first describes the large differences in the size and structure of these taxes among OECD countries, and then reviews the types of assumptions that are typically made when estimating the redistributive impact of these taxes. Based on this review, the paper advocates the wider adoption of the methodology that is currently adopted by government statisticians in Australia, Canada and the United Kingdom – based on input-output tables and on the modelling of a large part of the consumption taxes levied on various types of final expenditures and production inputs. The paper argues that, beyond methodological differences, all studies agree that consumption taxes have a significant regressive impact on the distribution of household disposable income. Illustrative simulations – based on applying the detailed findings on the incidence of consumption tax in one country (Australia) to the tax structure and income distribution of other OECD countries suggests that omission of consumption taxes affects estimates of the overall size of the redistribution achieved through the tax system and of how this differ across countries and evolves over time.
Work ID

User activity

e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this work

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this work

Add a comment

Show comments and reviews from Amazon users