Charles E. McLure

A hybrid consumption-based direct tax proposed for Bolivia

In 1994 the authors designed a consumption-based direct tax for the government of Bolivia. The proposal combined yield exemption treatment (exemption of interest income and no deduction for interest expense) of individuals with consumed income tax treatment (taxation or deduction of the net proceeds of borrowing and lending, as well as interest income and expense) of business. This article explains why taxation based on cash flow has administrative and economic advantages over a conventional income tax and why the hybrid system proposed is preferable to either pure form of consumption-based tax.

Administrative Advantages of the Individual Tax Prepayment Approach to the Direct Taxation of Consumption

One of the most important fiscal developments of the past twenty years has been the worldwide growth in reliance on the value-added tax (VAT). Following its adoption by the European Common Market in the 1960s, the VAT has become the “workhorse” of fiscal systems throughout the world. At least forty countries now levy VATs, and many others use other forms of broad-based general sales taxes, as well as more selective taxes on consumption.1

Tax Incidence, Macroeconomic Policy, and Absolute Prices

I. Introduction, 254. — II. The model, 255. — III. Relative prices and tax incidence, 257. — IV. The analysis of the model, 259. — V. Concluding remarks, 265.

Consumption-based Direct Taxes: A Guided Tour of the Amusement Park

Although consumption-based direct taxation has long been advocated in academic and policy circles, very few countries have actually implemented such taxes.This article provides an overview of alternative approaches to direct consumption taxation and examines arguments favoring consumption taxes over income taxes. It then describes and analyzes efforts at fundamental tax reform involving replacing an income tax with a consumption tax in the United States and in several developing countries and countries in transition from socialism in which the authors have been involved.

The Duistribution of Income and Tax Incidence in Panama: 1969

This paper reports estimates of the distribution of income and tax Abstract incidence in Panama in 1969. The distribution estimates are based upon the 1969 manpower survey, social security, income tax and Canal Zone records, and detailed studies of nonemployment incomes in each major industry. Despite the existence of the Panama Canal and a substantial commercial sector, the distribution of income seems to be no less unequal than in other Latin American countries. However, there is some evidence that the tax structure of Panama may be mildly progressive throughout.

Administrative Vorteile des individuellen Steuervorauszahlungs-Ansatzes gegenüber einer direkten Konsumbesteuerung

Eine der bemerkenswertesten finanzpolitischen Entwicklungen der letzten zwanzig Jahre war die weltweit zunehmende Bedeutung der Mehrwert- oder (Netto-) Umsatzsteuer (USt). Nachdem diese Steuer in den sechziger Jahren von den Landern der Europaischen Gemeinschaft eingefuhrt wurde, stellt sie heute das steuerpolitische „Zugpferd“ in nahezu allen Teilen der Welt dar. Mindestens vierzig Lander erheben mittlerweile eine Mehrwertsteuer; in vielen weiteren Staaten gibt es andere Formen einer umfassenden oder auch einer mehr speziellen Besteuerung des Verbrauches.1