Table of Contents
One: Opening Lectures.- The Superiority of a Consumption-Based Tax System.- I. Introduction.- II. Alternative Ways of Attaining a Consumption-based Tax System.- III. Principal Reasons fovouring the Consumption Approach in Taxation.- A. Tax Incidence and the Real Burden of Taxation.- B. Functional Efficiency Virtues of Taxing Consumption.- C. Minimizing Excess Burdens by Taxing Consumption.- D. Equity Virtues of Taxing Consumption.- IV. Strategies in Favour of a Consumption-based Tax System.- On Choosing the “Correct” Tax Base — A Historical Perspective.- I. National Income or Output as Potential Base.- II. Personal Income as Index of Taxable Capacity.- III. The Case for Consumption as Tax Base.- IV. Minimizing Dead-Weight Loss.- Two: Theoretical and Empirical Foundations of Taxing Consumption.- The Short Run and Long Run Welfare Effects of Implementing a Practical System of Consumption Taxation.- I. Introduction.- II. Main Issues in the Design of a Feasible Consumption Tax Base.- III. The Effects of Personal Tax Base Reform on Saving and Welfare.- IV. Dynamic Welfare Economics: A Cursory Review of the Literature.- V. The Relevance of Dynamic Welfare Theory for Tax Reform.- Comments by Michael Ahlheim.- Consumption and Income Taxation: Horizontal Equity and Life Cycle Issues.- I. Introduction.- II. Income and Consumption Taxes in a Simple Life Cycle Model.- III. Extensions to the Basic Model.- IV. Principles of Horizontal Equity.- V. Conclusions.- Comments by Syed M. Ahsan.- Taxation of Income, Consumption, and Wages in an Open Economy.- I. Introduction.- II. The Household Sector.- III. The Business Sector.- IV. The Government.- V. The Model with Exogenous Terms of Trade.- VI. The Effects of Tax Policy when the Terms of Trade are Exogenous.- VII. Tax Policy and the Terms of Trade.- VIII. Summary and Conclusion.- Comments by Pierre Pestieau.- On the Specification of Simulation Models for Evaluating Income and Consumption Taxes.- I. Introduction.- II. The Simulation Models.- A. A Model with a Simple Present/Future Choice.- B. Infinite-Horizon Model.- C. Overlapping-Generations Life-Cycle Model.- III. Results.- IV. Conclusion.- Comments by Gunter Stephan.- Comments by Karl W. Roskamp.- Three: Taxing Consumption from a Public Choice and Constitutional Point of View.- Consumption Taxation and Democratic Process.- I. The Public Choice Approach to Tax Issues.- II. The Political Model: Modified Leviathan.- III. Tax Substitution: Consumption versus Income Taxation.- A. Consumption Tax and Tax Efficiency.- B. Cost Share Effects.- C. Fiscal Illusion.- D. Summary.- IV. Tax Supplementation: Consumption Tax and the Tax Mix.- V. In Summation.- Comments by Peter Bernholz.- Comments by Frans van Winden.- Public Choice and the Consumption Tax.- I. Public Choice Considerations.- II. Flies in the Public Choice Ointment.- III. The Adoption of the Personal Income Tax in the United States.- IV. Conclusions.- Comments by Bengt-Arne Wickström.- Fiscal Principle, Fiscal Politics, and Consumption Taxation.- I. Fiscal Principle and the Grammar of Tax Advocacy.- II. Optimal Discrimination through Political Processes?.- III. Self Interest, Political Incentive, and Consumption Taxation.- IV. Fiscal Politics in Constitutional Perspective.- Comments by Charles B. Blankart.- Four: Legal Aspects of Taxing Consumption.- Taxing Consumption from a Legislative Point of View.- I. Introduction.- II. Constitutional Fundamentals of Taxation.- A. Taxation in a Democratic State Based on the Rule of Law.- 1. The Rule of Law.- 2. Reform of the Tax Law in a Democracy.- 2.1. Stable und Unstable Elements of the Law in a Democracy.- 2.2. Juridico-Economie Perspectives of Tax Reforms.- 2.3. Fundamental Reform of the Tax Law in a Democracy?.- B. Equality, Liberty and Social Solidarity as Constitutional Fundamentals for a Consumption-orientated Reform of Tax Systems.- 1. On the Constitutionally Guaranteed Basic Consensus as regards Equality, Liberty and Social Solidarity.- 2. Equality.- 2.1. System-Consistent Taxation in Accordance with the Ability to Pay.- 2.2. Consumption as a Fair Indicator of a Person’s Ability to Pay Taxes.- 3. Liberty and Social Solidarity.- 3.1. The Concept of the “Social Market Economy”.- 3.2. Adequacy of Consumption Taxation within a Free Enterprise System.- 3.3. Neutrality of Consumption Taxation.- 3.4. Prerequisites for Social Solidarity.- III. Approaches to a Consumption-orientated Reform of the German Tax System.- A. Necessity for a Multiple Tax System Based on Diverse Ability-to-pay Indicators.- B. Juridico-Institutional Framework.- C. Substitution of the Income Tax, the Corporation Tax, the Trade Tax (Gewerbesteuer) and the Wealth Tax (Vermögensteuer) by a General Tax on the Consumed Income and a General Tax on the Saved Income.- D. Extension of the Corporation Tax to a General Tax on the Saved Income.- 1. Approach: Separate Taxation of Saved Income and Consumable Income.- 2. The General Tax on the Saved Income as a “Business Tax” (“Betriebsteuer”); Technicalities.- 3. Relationship between the Proportional “Business Tax” and the Progressive Tax on the Consumable Income.- E. On the Legislative Realization of the Concept.- IV. Summary.- Five: Administrative Aspects of a Consumption-based Tax System.- Administrative Advantages of the Individual Tax Prepayment Approach to the Direct Taxation of Consumption.- I. Introduction.- II. Main Features of Income and Consumption Taxes.- A. The Income Tax.- B. The ICF/RF Consumption Tax.- C. The ITP/R Consumption Tax.- III. A Comparison of Consumption and Income Taxes.- A. Relative Advantages of Consumption-based Taxation.- B. Relative Disadvantages of the Consumption-based Tax.- IV. Advantages of the ITP/R Tax Over the ICF/RF Tax.- A. Individual Issues.- B. Business Tax Issues.- V. Problems of the ITP/R Approach.- A. Problems Related to the ITP/R Treatment of Interest.- B. Other Structural Issues.- C. Transitional Issues.- VI. Conclusion.- Appendix Income and Consumption Taxes: Structural Issues.- A. Consumption vs. Income Treatment of Businesses.- B. The Treatment of Business Investment and Debt.- C. Consumption vs. Income Tax Treatment of Individuals.- D. The Treatment of Gifts and Bequests.- Comments by Wolfram F. Richter.- Alternate Roads to Consumption Taxation — Administration Versus Tax Structure.- I. Background Issues.- A. Transfer Payments.- B. Open Economies.- C. Withholding.- II. Administrative Considerations in Selecting Among Personal Consumption Taxes.- III. Conclusion.- Comments by Sven-Olof Lodin.- Administration Problems of an Expenditure Tax.- I. Administration: The Achilles’ Heel of an Expenditure Tax.- II. Methods of Expenditure Tax Administration.- A. The Direct Method of Expenditure Tax Administration.- B. The Cash-Flow Method of Expenditure Tax Administration.- C. The Wealth-Accrual Method of Expenditure Tax Administration.- D. The Tax-Prepayment Method of Expenditure Tax Administration.- E. The Taxing-Business-Cash-Flows-Cum-Wages Method of Expenditure Tax Administration.- III. Consumer Durables: The Main Administrative Blunder of an Expenditure Tax.- IV. Gifts, Bequests, and Exchanges.- V. Interest Payments.- VI. Insurance, Social Security Contributions, Lotteries, and Necessitous Expenditures.- VII. What must be Registered?.- VIII. Problems of International Taxation.- IX. Problems of Regime Transition.- X. Evaluating of an Expenditure Tax.- Comments by Albert J. Rädler.- Six: Taxing Consumption from an International Point of View.- International Coordination Problems of Substituting Consumption for Income Taxation.- I. Role of Taxes and Tax Coordination in International Setting.- A. Types of Tax and Base Assignment.- B. Coordination and its Objectives.- 1. Internation Equity: Entitlement to Tax Bases.- 2. Internation Equity: Burden Shifting.- 3. Allocative Efficiency.- 4. Interresident Equity.- C. Coordination or Competition?.- D. Harmonization, Equalization or Centralization?.- II. Coordination of Symmetrical Income Tax Systems.- A. Individual Income Tax.- B. Absolute Corporation Income Tax.- C. Integrated Corporation Tax.- III. Coordination of Symmetrical Consumption Tax Systems.- A. In Rem Consumption Taxes.- 1. Coordination Requirements: Internation Equity.- 2. Coordination Requirements: Neutrality.- B. Personal Consumption Taxes.- 1. Coordination Requirements: Internation Equity.- 2. Coordination Requirements: Neutrality.- C. Business Cash Flow Tax.- 1. Coordination Requirements: Internation Equity.- 2. Coordination Requirements: Neutrality.- IV. Coordination of Consumption Taxes with Income Taxes.- A. Coordination Requirements: Internation Equity.- B. Coordination Requirements: Neutrality.- V. Summary and Conclusion.- Comments by Norbert Andel.- Comments by Klaus Vogel.- Problems of International Tax Coordination under Alternative Consumption Tax Regimes.- I. Introduction.- II. International Problems.- A. The Structure of Problems.- B. World-wide Consumption Taxation.- 1. Consumption.- 2. Savings.- 3. Income.- C. Unilateral C-taxation.- 1. Consumption.- 2. Savings.- 3. Income.- III. Conclusion.- Comments by Rolf Caesar.- Do International Tax Relations Impede a Shift Towards Expenditure Taxation?.- I. Introduction.- II. The Range of International Tax Arrangements.- III. Expenditure Tax Scenarios.- IV. International Tax Relations and Value Added Tax.- V. International Tax Relations and Cash-Flow Company Taxes.- VI. International Tax Relations and a Personal Expenditure Tax.- VII. A Political Economy View of Tax Reforms in Open Economies.- VIII. Conclusion.- Comments by Francesco Forte.- Comments by Klaus Vogel.- Participants.